July 2025 Market Update

Overview

Global markets extended their rally in July with UK investors seeing a 5.7% total return in global equities. UK and US benchmark indices both reached record highs as recession fears continued to fade amid resilient economic data and strong earnings reports.

The month’s dominant theme was tariffs. The newly agreed US tariffs on goods from Japan and the EU – though lower than initially feared and including auto exports – provided short term relief. Overall, the effective tariff rate on US imports now exceeds 15%, the highest in over eight decades.

Economic indicators remained broadly supportive, with inflation slowing and consumer spending holding firm. Market volatility, as measured by the VIX, fell to its lowest level since early 2022, signalling investor confidence despite underlying risks. However labour market data, particularly in the US, showed signs of cooling, warranting closer monitoring in the months ahead.

Full update below…