Market Update

Source: JPMorgan Guide to the Markets. Data as of June 30, 2025. Performance in %.

Backdrop

The second quarter saw significant volatility, mainly triggered by the global tariff situation. Markets fell sharply in April, but volatility isn’t only negative – several markets rebounded to hit new record highs by quarter-end. Many asset classes and sectors that dipped near bear market territory (e.g. US Small-cap companies) have nearly recovered for the year. We also witnessed increased market breadth; while Technology stocks led the charge in Q2, other categories also had significant rallies (US Small, Energy, etc.).¹

International continues to perform strongly, in line with a relatively weaker dollar. Despite pressures on the bond market from Fed policy and rising deficit concerns, bond yields showed resilience and stabilized by the end of the quarter.

On the macroeconomic front, some softness emerged as businesses assessed the potential impact of tariffs. Inflation remained below 3%, and while not published yet at the time of writing, June is expected to follow suit.

Unemployment edged down from 4.2% to 4.1%, though signs of cooling appeared in certain sectors.² The housing market has softened slightly, likely due to persistently high interest rates. Overall, the economy remains in expansionary territory.³

Looking Ahead

Many factors and trends we monitor are positive, yet we remain cautiously optimistic while staying closely attuned to how policy developments – especially around tariffs – may shape market behavior. With the “hard” tariff deadline extension of August 1^st, we may experience renewed volatility and uncertainty if trade deals are not completed by then. The Federal Reserve has also come under pressure to soften their interest rate policy, though Jerome Powell recently stated they will maintain a “wait and see” approach.

Volatile times, while nerve-racking, are a great time to revisit financial plans and portfolios to make sure everything is still in line with your goals and expectations. Periods like these serve as reminders of the importance of staying grounded in a sound, long-term financial plan and investment fundamentals. Rest assured that we are continuously monitoring not only markets and the portfolios we manage but also looking out for the most important part – the families we work with. We do not take this responsibility lightly and are grateful for your ongoing trust.

Please do not hesitate to reach out to us with any questions or concerns.