Market Update: July 8, 2025
In a holiday-shortened week, economic data included improvement in both ISM manufacturing and services surveys. The monthly employment situation report was positive at the surface, but skewed by a few categories within it, muting the impact.
Equities experienced gains in the U.S., largely due to tax legislation passing, while international stocks were mixed. Bonds fared positively, as credit spreads tightened. Commodities gained with higher prices in oil and precious metals.
U.S. stocks saw gains last week, with little trade news and unsurprising economic data for the most part, but investors were watching the progress of the Congressional budget reconciliation bill, which was passed by the Senate on Tues. and the House Thurs. afternoon. This seemed to help equity sentiment along with the decent jobs report that continues to show tariff fears haven’t done too much damage to the economy (and earnings). Despite little trade news, the 90-day tariff pause is due to expire this coming week on Jul. 9, with market expectations for an extension. Stock earnings report for Q2 will begin mid-month, with an expected deceleration from the robust Q1 pace.
Every sector ended in the positive last week, led by materials up nearly 4%, then the diverse group of financials and technology. Bringing up the rear was a slight decline in communications. Real estate gained nearly 2%, despite higher interest rates.
Foreign stocks were mixed, with minimal gains in Europe and the U.K. offset by a small decline in Japan, as trade negotiations with the U.S. appeared to stall. Comments from the ECB again pointed to their policy targets having now been reached, lowering the chances for future cuts in the near-term. Emerging markets outperformed, with stronger rises in Turkey, Brazil, and South Korea; Chinese stocks fell back slightly.
Bonds were mixed to higher for the week. U.S. Treasuries fell back as interest rates ticked up, but tighter spreads pushed investment-grade and high yield corporate bonds higher, along with floating rate bank loans. Foreign bonds also gained, as the U.S. dollar weakened slightly and emerging markets benefited from a pro-risk environment.
Commodities gained broadly last week, led by energy and precious metals, and lesser movement elsewhere. Crude oil rose over 2% last week to $67/barrel, in a relatively calm week after the sharp drop from $75 in mid-June at the height of the Middle East Israel-Iran tensions. However, natural gas spot prices fell by -9%, along with higher inventory builds and mixed weather impacts.
The information above has been obtained from sources considered reliable, but no representation is made as to its completeness, accuracy or timeliness. All information and opinions expressed are subject to change without notice. Information provided in this report is not intended to be, and should not be construed as, investment, legal or tax advice; and does not constitute an offer, or a solicitation of any offer, to buy or sell any security, investment or other product.