The United States once again led global market performance in July, with US equities benefiting from strong corporate earnings, resilient economic data and growing expectations of lower interest rates. Large technology companies reported robust quarterly results, reinforcing investor confidence in sectors linked to artificial intelligence (AI) and digital infrastructure. The S&P 500 gained approximately 2.5% during the month, while the Nasdaq rose close to 4%.
US Markets Supported by Strong Earnings and Economic Data
US economic indicators remained broadly supportive throughout July. The labour market continued to show resilience, consumer spending remained solid and inflation trends pointed towards a gradual return to the Federal Reserve's long-term target. Together, these factors strengthened expectations that the US economy could continue to grow without a significant slowdown.
European Equities Gain as ECB Rate Cuts Remain in Focus
European markets also posted gains in July. The Euro Stoxx 50 rose approximately 1.8%, supported by declining inflation and expectations that the European Central Bank (ECB) could continue reducing interest rates during the second half of the year. Although economic growth in the euro area remains modest, improving financing conditions have helped strengthen investor sentiment.
China Faces a More Challenging Economic Environment
China continued to face a more challenging environment. Additional measures aimed at stimulating domestic demand and supporting the property sector provided some reassurance, but consumer confidence and private investment remained relatively weak. Chinese equities consequently underperformed many developed markets.
Emerging Markets Deliver Positive Returns
Emerging markets delivered a more positive performance in July. The MSCI Emerging Markets Index gained approximately 1.2%, reflecting strong growth prospects in countries such as India and improving investor appetite for risk assets. Several Latin American markets also benefited from stable commodity prices and expectations of more supportive monetary policies.
Oil and Gold Remain in Focus
Commodity markets remained relatively calm throughout July. Oil prices fluctuated during the month but ultimately finished close to their starting levels, helping to contain inflation concerns. Gold remained near historical highs as investors continued to use the precious metal as a diversification tool amid ongoing economic and geopolitical uncertainty.
Long-Term Investing Remains Important
Overall, July reinforced the importance of maintaining a long-term investment perspective. Short-term volatility remains inevitable, but resilient economic activity, solid corporate earnings and easing inflation continue to provide a broadly supportive backdrop for global investors.
Investment fund performance
The following chart illustrates recent fund performance across selected investment strategies, providing additional context to the market trends discussed above.
The Optimize Invest Selection is a balanced fund investing in both equities and bonds, advised by Euroconsumers Invest in 2025. For further information on the fund’s characteristics, terms and conditions, and factsheet, please visit https://optimize.pt/en/investment-funds/invest-selection/