U.S. Markets
Markets rose in the second quarter as investors witnessed the new U.S. trade policy’s impacts unfold, while tensions continued in the Middle East.
The Standard & Poor’s 500 Index rose 10.57%, while the Nasdaq Composite climbed 17.75%. The Dow Jones Industrial Average gained 4.98%.1
April Showers
Soon after the closing bell rang on April 2, investors were caught off guard by a tariff update from the White House. Global markets reacted to the news overnight. Stocks declined over several sessions.2
After the White House announced on April 9 a 90-day pause on specific tariffs, markets pushed higher.
The S&P 500 gained 9.5%—its largest one-day increase in 17 years. Stocks rallied late in the month on news that the administration intended to de-escalate tariff tensions with China.3,4
May Flowers
Stocks rebounded strongly in May as certainty around trade increased and investor anxiety lessened. Soft inflation data also helped push stock prices higher. By the end of May’s second full week, the S&P 500 had erased its year-to-date losses.5
After a well-received quarterly corporate report from a mega-cap AI chipmaker, a trade update unsettled investors. The S&P 500 finished the strongest May in 30 years. 6,7
June Shoots
For June, international matters took the spotlight, with continued tariff talk between the U.S. and China, and conflict in the Middle East resulting in a ceasefire.
Solid corporate earnings, a still-strong labor market, and a recovery in artificial intelligence-related stocks provided some underlying strength to the rally, with the S&P 500 and Nasdaq hitting all-time highs.8,9,10,11,12
What Investors May Be Talking About in July
The White House’s trade policy began in earnest on April 2, right at the start of the second quarter. It’s unclear how upcoming reports might reflect trade policy.
The Bureau of Labor Statistics scheduled its import and export report mid-month, expecting to provide some early insights into trade policy.
The Bureau of Economic Analysis will give investors its first glimpse at second-quarter economic activity at the end of the month. The Atlanta Fed’s GDP Now model, which provides a running estimate based on available economic data, has been trending higher since April.14
World Markets
The MSCI EAFE Index rose 10.58% over the quarter, its second consecutive winning quarter.15
Almost every European market advanced over the quarter, with Spain (+6.52%) and Germany (+7.88%) leading the major developed European economies. Italy (+2.54%), the United Kingdom (+1.50%), and France (-1.60%) trailed the Index.16
Pacific Rim markets also did quite well. Korea (+23.80%) stood out clearly, and Japan (+13.67%) also beat the overall Index. Australia (+8.91%) also performed well, while Hong Kong (+4.12%) delivered more modest returns.16
The Fed
The Federal Open Market Committee (FOMC) held rates steady at its June meeting. Fed Chair Powell said policymakers are “well positioned to wait” before moving on short-term rates.
He added that while the labor market is in balance, the Committee expects “a meaningful amount of inflation in the coming months…. We have to take that into account.” When testifying before Congress on June 24, Powell stayed on point with essentially the same message despite pressure from the White House to cut rates.
Policymakers still have penciled in two rate cuts between now and year-end.26,27
The FOMC scheduled the next meeting for July 29-30.
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1. WSJ.com, June 30, 2025
2. WSJ.com, April 4, 2025
3. WSJ.com, April 9, 2025
4. CNBC.com, April 22, 2025
5. CNBC.com, May 12, 2025
6. CNBC.com, May 13, 2025
7. Finance.Yahoo.com, May 30, 2025
8. MarketWatch.com, June 5, 2025
9. CNBC.com, June 24, 2025
10. WSJ.com, June 6, 2025
11. CNBC.com, June 12, 2025
12. WSJ.com, June 27, 2025
13. Sectorspdrs.com, June 30, 2025
14. GDPNow.com, June 17, 2025
15. MSCI, June 30, 2025
16. WSJ.com, June 30, 2025
17. BEA.gov, June 26, 2025
18. WSJ.com, June 6, 2025
19. CNBC.com, June 17, 2025
20. FederalReserve.gov, June 17, 2025
21. MarketWatch.com, June 18, 2025
22. National Association of Realtors (nar.realtor), June 23, 2025
23. Realtor.com, June 25, 2025
24. CNBC.com, June 11, 2025
25. KPMG.com, June 26, 2025
26. WSJ.com, June 18, 2025
27. WSJ.com, June 24, 2025
28. IDFA.org, June 2025
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