The S&P 500 TR Index showed a positive return of 2.24% for July 2025, reflecting overall market strength. Growth-oriented stocks outperformed value, and the NASDAQ 100 gained 2.41%, underscoring continued momentum in technology and AI-related companies. International markets were mixed, with Asian markets outperforming while European and other regions lagged. Bonds generally posted negative returns, suggesting investors favored equities over fixed income securities. Sector rotation was evident, with utilities and industrials gaining favor while healthcare and consumer staples came under pressure.
Economic activity increased slightly, though unevenly across regions. Employment grew very modestly, with hiring restrained by ongoing economic and policy uncertainty. Consumer spending declined, manufacturing activity edged lower, and construction slowed amid rising costs. Inflation remained above the Federal Reserve’s 2% target, fueled by input cost pressures tied to tariffs. The Fed maintained its target range for the federal funds rate at 4.25%–4.50%, highlighting persistent uncertainty in the outlook. Labor shortages were reported in skilled trades, with reduced availability of foreign-born workers due to immigration policy changes. Businesses noted modest to pronounced cost increases in raw materials and continued to invest in automation and AI to reduce reliance on new hiring.
