July Commentary

We are already halfway through the year, and 2025 has certainly been a chaotic ride for equity markets. Following two consecutive years of robust performances free of self-inflicted economic trauma (& drama), the S&P 500 and Nasdaq got off to modestly positive starts in 2025. That all changed when the growing imposition of trade tariffs on foreign countries caused U.S. indices to all plummet by double-digit percentages, as stock investors were “liberated” from their wealth.

However, indices returned to setting new all-time highs by the end of Q2 in a remarkable V-shaped recovery. The S&P 500 ended the first half of the year up 5.5%, lifted higher by the Technology sector. In fact, the Technology sector logged the biggest reversal, coming back from down as much as 22.7% YTD through April 8th to end the six-month period up 8.9%. Key drivers behind the equity markets ascent included:  rising investor confidence surrounding the easing of Middle East tensions, relatively muted inflation despite the higher tariffs, and increasing trade optimism given the Trump administration’s recently softened focus on the self-imposed deal deadlines.

Commodities also endured some notable volatility. Oil prices soared as much as 25% within the month of June amid concerns of lower output stemming from the Israel-Iran conflict. The spot price of gold ended the month slightly higher after snapping a four-month win streak in May, resulting in the SPDR Gold Shares ETF (GLD) setting a new all-time high halfway through the June. Finally, Bitcoin rose 4.2% in June, bringing the asset class up 17% YTD.

One of the notable losers in June was the US dollar, continuing its dismal year-to-date performance in 2025. Specifically, the currency has weakened more than 10% over the past six months when compared with a basket of currencies (Euro, Japanese Yen, British Pound) from the country’s major trading partners. The last time the dollar weakened so much at the start of the year was 1973, after the Nixon Administration had made a seismic shift that ended the convertibility of the dollar into gold. Even as the Trump administration has backed down from the most extreme tariffs and the U.S. stock markets have recovered from their losses earlier in the year, the dollar has continued to slide — arguably suggesting that the world is sending the U.S. a message. Fortunately, the U.S. unequivocally remains the global leader in rule of law, entrepreneurship, depth of capital markets, and technological innovation.

Finally, while valuations in general are looking somewhat lofty, we are still finding deep pockets of value amongst the investment universe. As a reminder, this focused commitment to research has provided the foundation for our healthy strategy returns in 2025.