Quarterly Market Outlook

Market volatility spiked in the second quarter as the S&P 500 dropped sharply in early April following the administration's announcement of sweeping reciprocal tariffs on major US trading partners.  However, those initial losses were steadily recouped over the remainder of the quarter as initial tariff rates were reduced and economic growth proved resilient while inflation stayed low.  This allowed the S&P 500 to hit a new all-time high and finish the quarter with a strong gain.

 

Below are highlights of the 2nd Quarter (Q2) and our outlook for the 3rd Quarter of 2025 (Q3).  Links will take you to our brief or expanded discussions, if interested.

2nd Quarter Wrap

  • The stock market completed an impressive rebound from the steep declines of early April, as steps by the administration to ease the tariff burden helped to boost investor confidence.  Further, corporate earnings remained strong and economic growth proved resilient, yet again, even in the face of geopolitical uncertainty and elevated policy volatility.

  • Q2 Wrap - brief

  • Q2 Wrap - full detail

2nd Quarter Performance

  • Foreign-developed markets posted strong returns for the quarter thanks to falling interest rates and generally resilient economic growth.

  • Bond markets realized modest positive returns in the second quarter, driven by stable inflation readings and signs of cooling U.S. economic growth late in the quarter.

  • Q2 Perf - brief

  • Q2 Perf - full detail

3rd Quarter Market Outlook

  • Economic data remained mostly resilient throughout the second quarter and, at the moment, there are no major economic indicators pointing to a material slowing of growth or a sudden rise in inflation.  However, the volatility in trade data has distorted elements of the economy.  These distortions should begin to settle by the end of the year and provide a clearer picture of economic strength or weakness.

  • Q3 Outlook - brief

  • Q3 Outlook - full detail

Authenticity

Trust

Competence

Caring

Connecting

Balance

Focus

Closing Note

Markets have been impressively resilient so far this year, but as we start the second half of 2025 there remain numerous, potentially significant risks to markets and the economy.

However, unless a more serious financial crisis occurs or geopolitical tensions escalate, we anticipate additional opportunities to reposition capital into attractive assets.

We thank you for your ongoing confidence and please do not hesitate to contact us with any questions, comments, or to schedule a portfolio review.

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