MarketWatch for July 2025
Global markets rose in July, driven by progress in trade negotiations and strong earnings from US tech firms. Equities performed well across regions, with notable gains in the US, UK, and Asia. Bond markets reacted to fiscal concerns, while commodities saw mixed results, with energy leading and metals and agriculture declining.
Global equities rose in July, supported by improved clarity on trade policy and upbeat earnings from major US technology firms. In fixed income markets, concerns around fiscal discipline led to a rise in government bond yields.
United States: Tech leads gains as trade deals settle
US shares posted solid gains in July. Ahead of the 1 August deadline, the US secured tariff agreements with several key trading partners, easing investor concerns. The information technology sector outperformed, driven by strong earnings from several “Magnificent Seven” firms. In contrast, defensive sectors such as healthcare and consumer staples underperformed.
Europe: Mixed sector performance amid modest growth
Eurozone equities moved higher, with healthcare and financials among the top-performing sectors. However, technology stocks lagged. Eurostat data showed the eurozone economy grew by 0.1% quarter-on-quarter in Q2 2025, reflecting a cautious but positive outlook.
United Kingdom: Broad-based gains across key sectors
UK equities delivered a positive return in July, supported by strength across several key sectors. Energy, healthcare, consumer staples, and telecommunications all performed well. Investor sentiment remained resilient despite ongoing political and economic uncertainties.
Asia: Japan and emerging markets shine
Japanese equities advanced, buoyed by a better-than-expected outcome in the Upper House elections and a favourable trade deal with the US. Emerging market equities also gained, with the MSCI EM index outperforming the MSCI World but trailing the S&P 500 and MSCI Asia ex Japan. Dollar strength posed a challenge, but strong showings from Taiwan, China, and Korea helped lift performance.
Fixed Income: Bond markets react to government spending concerns
Bond markets were influenced by ongoing trade talks and worries about government spending. As a result, returns on government bonds increased, especially for shorter-term bonds. In the US, a new spending bill, nicknamed the “Big Beautiful Bill”, sparked debate. It included tax cuts and more funding for defence and border security, but also reduced support for social programmes. This raised concerns about the country’s growing deficit.
Corporate Bonds: Positive returns across ratings
Corporate bonds outperformed government debt in July. In the US, strong earnings and a constructive outlook supported performance across both investment grade and high yield segments.
Commodities: Energy remains dominant
Commodity markets saw mixed performance in July. Energy prices continued to rise, remaining the strongest area. In contrast, industrial metals and agricultural goods saw declines. Gold prices stayed relatively stable throughout the month.
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