Quarterly Market Summary
Throughout the second quarter of 2025, global trade tensions caused by reciprocal tariffs and increasing unrest in the Middle East impacted the markets daily. A new wave of tariffs, particularly against China, created widespread market anxiety and triggered a downturn in April. This was followed by a 90-day de-escalation period announced in May, which temporarily paused some of the heightened tariffs and led to a sharp market rally. The uncertainty surrounding ongoing trade negotiations and the potential for new tariffs remained a key source of volatility throughout the quarter. After a tumultuous start to the quarter, the market showed remarkable resilience and ended June on a high note.
U.S. stocks rebounded in Q2. The S&P 500 began 2025 by enduring its first negative quarter since 2023 and followed that by a decline in April. However, the S&P 500 rebounded later in Q2 to post sharp gains in May and June. The NASDAQ, which had declined over 10.0% in the first quarter, showed strength in the second quarter, driven by growth in AI shares and digital stocks.
While inflation did not escalate to the level some analysts anticipated due to increased tariffs, consumer prices remained somewhat elevated. The Fed maintained a cautious stance on interest rates, keeping them unchanged, as it balanced the need to control inflation with the potential for an economic slowdown. Early returns on corporate earnings in Q2 have been mostly favorable, offering cautious optimism for companies in the second quarter. The overall growth trajectory of the U.S. economy for the remainder of 2025 is anticipated to be slower than in previous years.
International Markets
In contrast to the U.S. markets’ early struggles this year, international markets, particularly those in Europe and Asia, performed well, partly due to a weakening U.S. dollar, which boosted the value of non-U.S. equities. In June, the STOXX Europe 600 Index fell 1.2%; the United Kingdom’s FTSE dipped 0.2%; Japan’s Nikkei 225 Index gained 8.1%; and China’s Shanghai Composite Index climbed 2.9%. For the second quarter, the STOXX Europe 600 index rose 1.4%; the United Kingdom’s FTSE gained 2.1%; Japan’s Nikkei 225 Index vaulted 13.7%; and China’s Shanghai Composite Index increased 3.3%.
On A Personal Note
Jeff played some hot days of golf. Hot temperature outside that is! Drew and his family visited Italy in June. It was the trip of a lifetime. Venice was his favorite stop, with Cinque Terre a close second! Chris’s oldest daughter competed in the YMCA national gymnastics championships in Green Bay, Wisconsin. They had a fun time, and they were very proud of her. Lisa and David spent a long weekend at Monroe Lake in Bloomington, Indiana with some friends. They had a great time boating and soaking up the sun! Sam spent a week on the beach with his family on Edisto Island, SC. The highlight of the week was a sunset dolphin cruise, they saw more than 2 dozen dolphins! On his way down he stopped in the Pisgah National Forest for a weekend of hiking and pretty views. Taylor can’t believe another month has come and gone. She is loving being a mom and recently celebrated Charlie rolling over for the first time. Of course, Taylor was more excited about it than Charlie; she was confused on why everyone was clapping!
