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July Market Commentary: Everything is Different Now Thumbnail

July Market Commentary: Everything is Different Now

Markets & Economy

June Recap and July Outlook

June packed in more global uncertainty. U.S. military action in Iran added fuel to already confusing tariff battles, while the economic outlook for the rest of 2025 and into 2026 dimmed a bit. The announcement of a new Fed Chair created what feels like a “shadow Fed,” adding another layer of mixed signals for investors trying to read the tea leaves. On top of that, Congress moved forward with the so-called “Big, Beautiful Bill,” which could blow up the deficit, and we all got front-row seats to the very public breakup between the richest man alive and the most politically powerful one.

Here’s the plot twist: both the stock and bond markets brushed off the noise and still delivered positive returns.

Are investors just numb after months of nonstop headlines, or is everyone quietly waiting for September before they start caring again?

Let's dig into the data:

  • Inflation (CPI) rose less than expected. For the 12 months ending in May, CPI was 2.4%. The monthly bump was only 0.1%.
  • Jobs held strong. Non-farm payrolls added 147,000 in June, well above expectations of 110,000. The unemployment rate fell to 4.1%.
  • The dollar weakened. The U.S. dollar index dropped more than 10%, hitting a three-year low compared to other currencies.
  • Growth expectations slipped. The Fed’s “dot plot” lowered GDP for 2025 to 1.4% from 1.7%, and 2026 to 1.6% from 1.8%.

What Does It All Mean?

Inflation is under control and jobs are solid, so don’t expect the Fed to cut rates anytime soon. Even though tariff talk is still dominating headlines, the hard data hasn’t shown much real-world damage yet. That might be because businesses built up inventory before tariffs kicked in and have been eating some of the extra costs instead of passing them on to consumers.

Markets tend to look ahead, and right now investors seem to be assuming tariffs will stick around but won’t wreck everything. In other words, higher costs may be the new normal, but manageable.

The rest of the year could look like this: a stock market that’s bumpy but still has momentum, a Federal Reserve that eventually cuts rates but takes its time getting there, and an economy that keeps grinding forward.

Chart of the Month: Consumer Pessimism Creeps Back

Consumer confidence slipped again in June. After a short-lived bounce when tariffs were rolled back in May, Americans across generations said they’re feeling the pinch. People are reporting fewer job opportunities, weaker income prospects, and frustration with high prices.

Source: Bureau of Economic Analysis (data), Axios (visual)

June Equity Market Highlights

  • S&P 500: +4.96%
  • Dow Jones Industrial Average: +4.32%
  • S&P MidCap 400: +3.38%
  • S&P SmallCap 600: +3.85%

Source: S&P Global. All performance as of June 30, 2025.

Nine of the eleven S&P 500 sectors ended the month positive. Tech led the pack again with a big +9.73%. Consumer Staples landed in last place at -2.21%. The “Magnificent Seven” mega-cap stocks carried almost half of the S&P’s monthly gains. Meanwhile, volatility measured by daily price swings slowed down but stayed high at 0.83%.

June Bond Market Highlights

  • 10-year U.S. Treasury yield: 4.24% (down from 4.40% in May)
  • 30-year U.S. Treasury yield: 4.78% (down from 4.92% in May)
  • Bloomberg U.S. Aggregate Bond Index: +1.54%
  • Bloomberg Municipal Bond Index: +0.62%

The Takeaway

Volatility is not going anywhere, which means investors need to stay clear-eyed about risk. The markets keep absorbing global drama, inflation fears, and political noise, yet they are still showing resilience at mid-year.

This is a good time to check whether your portfolio lines up with your values and your comfort level. For investors who care about impact, this could mean looking beyond just returns and thinking about how your dollars influence the world. Markets may be chaotic, but you still have power over how your money works for you and for the future you want to help shape.

This work is powered by Advisor I/O under the Terms of Service and may be a derivative of the original. The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.