During July 2025, global financial markets showed a positive performance across equities and bonds, shaped by strong earnings, trade developments, and central bank policy decisions.
The S&P 500 rose 2,2% and the Nasdaq Composite gained 3,7%, in the United States. Large-cap growth stocks led the rally, especially in the tech sector, with Nvidia and other "Magnificent 7" stocks performing strongly.
In the macroeconomic context, the U.S. GDP rebounded with a 3.0% annualised growth rate in the 2nd quarter, and the inflation remained elevated, with the core consumer price index reaching a 2.9% year-over-year. As expected, the Federal Reserve held rates steady at 4.25%-4.50 %.
Regarding tariffs, a historic United States–EU trade agreement was reached at the end of the month, reducing the threatened 30% tariff to 15% for most EU goods.
Uncertainty and resilience in Europe
In Europe, financial markets showed resilience and moderate growth (the Stoxx Europe 600 rose 0,9% in the month), with equities continuing their strong year-to-date performance supported by financials, utilities, and telecoms.
Trade tensions also created uncertainty for European exporters, but late progress in negotiations helped ease fears. Final note in this region for the European Central Bank that held interest rates steady in July, pausing its easing cycle after eight cuts over the past year.
Emerging markets also evolved in the same tone, driven by the strength in Greater China and Korea.
Bond markets are optimistic, but keep diversifying
As far as the bond market, the treasury yields rose across the curve, with the 10-year Treasury in the United States increasing to 4,4% and the 30-year briefly exceeding 5%.
Bonds reflected cautious optimism in the other side of Atlantic. Despite rising debt levels and inflation concerns, European bonds attracted renewed interest, especially in high-quality credit.
Continue to privilege diversification and maintain a solid long-term strategy for your investments. Our specialists indicate the following asset allocation:
