July 2025 | Monthly market recap
New tariff deals offered a degree of certainty for markets
The Trump administration struck tariff deals with both Japan and the European Union in July, lowering the rate on imports to the United States to 15% for both trading partners. The markets generally reacted favorably to the news, which came on the heels of a trade deal with the United Kingdom that generally cut tariff rates to 10%.
ONE-MONTH PERFORMANCE as of 6/30/25 | ||||
|---|---|---|---|---|
U.S. large caps (S&P 500) | U.S. small caps (Russell 2000) | International developed (MSCI EAFE) | Emerging markets (MSCI EM) | Investment-grade bonds (Bloomberg Agg) |
2.24% | 1.73% | –1.39% | 1.95% | –0.26% |
Source: Boston Partners; all data via individual index providers. Past performance does not guarantee future results. See below for definitions.
S&P 500 notched another all-time high
KEY ECONOMIC INDICATORS | |||||
|---|---|---|---|---|---|
GDP | Fed funds rate | 10-year UST | Inflation (CPI) | Jobs | |
Most recent | 3.0% | 4.25%–4.50% | 4.37% | 2.7% | 73,000 |
Month prior | –0.5% | UNCH | 4.24% | 2.4% | 14,000 |
Sources: Gross domestic product (GDP) via the U.S. Bureau of Economic Analysis. Federal funds rate via the Federal Reserve Bank of St. Louis (FRED). 10-year U.S. Treasury (UST) rates via the U.S. Department of the Treasury. Inflation (CPI) and jobs (non-farm payroll figures) via the U.S. Bureau of Labor Statistics. All “most recent” data is for the month of July and is compared with the month prior, except CPI, which reflects a one-month lag.
Tech stocks continued to lead the market
Information Technology was the best performing sector among large-company stocks in July, while growth-oriented names outperformed their value counterparts across the board. The questions that emerged in April and May surrounding the sustainability of Big Tech’s AI spending spree are, once again, issues investors seem willing to overlook; Alphabet and Apple both reported solid earnings in July.
International stocks traded lower as the U.S. dollar reversed course
International stocks hit a bit of a speed bump in July, recording their first monthly decline since March. Part of the sell off may have been profit taking, particularly among institutional investors and hedge funds. The U.S. dollar also bounced back to close out the month higher, which acted as an additional headwind for the asset class.
Bond markets declined slightly amid rising yields
Intermediate-term, investment-grade bonds slipped in July, as investors demanded higher yields. The size of the federal government’s deficit has led to growing concerns among fixed-income investors, while a lack of clarity about the future direction of short-term rates added to the sense of market uncertainty.
Federal Reserve left rates unchanged, but with new fissures in the consensus
In its June meeting, the Fed’s Federal Open Market Committee (FOMC) once again voted to leave short-term interest rates unchanged, but it wasn’t a unanimous decision: The meeting marked the first time two federal reserve governors have dissented from the decision in over 30 years. The dissenting duo preferred instead to cut rates, and may not have long to wait to get their wish. The May and June employment figures were revised sharply downward—from an estimated 291,000 jobs added over those two months to a paltry 33,000—while the July numbers came in well below the consensus estimate. The Fed meets again in September and, as of this writing, the odds of a rate cut then stand at almost 3 to 1.
Upcoming key events
August 12: Consumer Price Index data release for June
August 19, 27: The Home Depot, Nvidia report earnings
Chart of the month
Big Tech has been writing some big checks lately: The combined capital expenditures of Amazon, Apple, Google, and Meta were roughly double in the most recent quarter what they were as recently as Q1 2024. It’s anyone’s guess how long these companies can continue to spend on their respective AI build-outs before it begins to impact earnings or share prices. But for now—and for the foreseeable future—the fiscal floodgates look to be wide open.
Source: Amazon, Google, Meta, and Microsoft via the Wall Street Journal, as of July 31, 2025. Data reflects calendar year quarters and includes finance leases.
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Important information
Boston Partners Global Investors, Inc. (Boston Partners) is composed of three divisions, Boston Partners, Boston Partners Private Wealth, and Weiss, Peck & Greer (WPG) Partners, and is an indirect, wholly owned subsidiary of ORIX Corporation of Japan (ORIX).
The views and opinions expressed may change based on market and other conditions. This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary. No investment strategy or risk management technique can guarantee return or eliminate risk in all market environments.
The Bloomberg U.S. Aggregate Bond Index tracks the performance of intermediate-term investment-grade bonds traded in the United States. The Consumer Price Index is a commonly used measure of inflation that tracks the variation in prices paid by typical consumers for retail goods and other items. The Magnificent Seven stocks are a group of high-performing and influential companies in the U.S. stock market: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla. The MSCI EAFE Index tracks the performance of large- and mid-cap equities traded across global developed markets, excluding the United States and Canada. The MSCI Emerging Markets Index tracks the performance of large- and mid-cap equities traded in global emerging markets. The Russell 2000 Index tracks the performance of the 2,000 smallest companies traded in the United States. The S&P 500 Index tracks the performance of the 500 largest companies traded in the United States. It is not possible to invest directly in an index. Any mention of specific securities is for informational purposes only and should not be considered a recommendation to purchase or sell those securities.
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