Happy July! The second quarter of 2025 gave us plenty of reasons to worry and to celebrate. It was a bit like watching Love Island (which I swear I only know about because of my teenage daughters - please don’t judge me): drama, uncertainty, last-minute recoveries and somehow everyone ends up in a better place by the finale.
And you thought I only watched sports...
Markets: New Highs Despite New Headaches
The S&P 500 climbed 10.6% and the ever tech-heavy Nasdaq surged 17.7% for the second quarter, both closing at record highs. June itself was no slouch, with the S&P 500 up nearly 5% and the Nasdaq 100 gaining over 6%.
Even international markets stayed in the mix - emerging markets rose about 5.5% and developed markets 2.4% for June alone. They definitely didn’t get dumped from the villa.
What drove the gains? Investors were rattled early by new tariffs in April and rising Middle East tensions in June, but once fears of escalation faded, markets shook off the nerves and powered higher.
The Dollar: Weak but Helpful
The U.S. dollar actually weakened through the quarter - even with all the tariff talk. That can be annoying for American tourists (sorry summer travelers), but great for U.S. companies selling abroad. A weaker dollar makes our stuff cheaper for foreign buyers.
Bonds: Playing Wingman
Stocks stole the spotlight, but bonds also delivered solid (if less exciting) returns. The Bloomberg U.S. Aggregate Bond Index was up 1.2% for the quarter.
Think of bonds as the loyal friend on Love Island who provides emotional support while everyone else is making grand declarations. They kept balanced portfolios from losing their heads when drama spiked.
Gold and Bitcoin: The Alt Assets
Gold hit a new record above $3,400 before cooling to around $3,308. Bitcoin surged past $111,000 in May before settling at $107,000. So yes, it wasn’t just stocks that felt the love.
Inflation, Rates and the Fed
Inflation was 2.4% year-over-year in May. The Fed left rates unchanged at 4.25–4.5%, planning to keep things steady while watching inflation drift toward their long-term goal (2.1% by 2027, if you believe their timeline).
They’re basically the stern parent on the show telling everyone to calm down.
Debt Ceiling and Budget Talks
Meanwhile, in Washington, there’s a lot of arguing about the national debt, now above $36 trillion. That’s roughly $106,000 per American. It’s serious, but historically these fights end with a deal. Markets know it’s a reality TV subplot that usually wraps up before ratings fall off.
The Big Picture
Despite trade fights, geopolitical flare-ups and debt worries, markets showed impressive resilience. It’s a reminder that the headlines can be noisy, but staying invested (and diversified) remains the best way to reach your goals.
So yes: like Love Island, markets can be messy, emotional and occasionally ridiculous. But also like Love Island (I hear), there’s a process, a method to the madness and - if you’re patient - often a happy ending.
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Thanks in advance and as always, if you want to talk about any of this - whether it’s markets, planning or even the ethics of watching reality TV with your teenagers - I'm here.
Until next time, take good care and have a great 4th of July!
