June 2025 Market Update

Overview

Markets proved turbulent in the first half of 2025, driven by geopolitical instability in the Middle East and renewed tariff actions by the US. Despite these headwinds, returns to UK investors were broadly flat, with a total return of –0.7%, supported by a 2.7% rebound in June.

Most major indices are ahead for the year. However, a notable theme has been a weaker US Dollar, which suffered its worst start to a year since 1973, falling 11% year-to-date. While many have questioned the US’s safe-haven appeal amid trade uncertainty, much of the Dollar weakness reflects rising expectations for rate cuts as the labour market weakens and inflation stays subdued - despite fresh tariffs. The weaker Dollar also amplified Gold’s rally, pushing it to record highs above $3,500/oz in May.

The Israel/Iran conflict was also a defining feature for markets, briefly pushing oil up over 20% mid-month before prices moderated. A fragile ceasefire is in place, but tensions persist around Iran’s nuclear programme.

Full update below…