Weekly Market Performance — July 25, 2025

Markets Blog

David Matzko, LPL Research

LPL Research provides its Weekly Market Performance for the week of July 21, 2025. The S&P 500 capped a record-setting week with another all-time high, gaining ground on all five days this week. The Nasdaq and Dow Jones Industrial Average also moved higher as investors analyzed a busy week for second quarter earnings. Trade developments also boosted global markets, with Washington striking multiple deals with trading partners and Asia, with the European Union (EU) reportedly coming soon, lifting stocks in both Europe and Asia. The Treasury market traded higher, clinging to weekly gains despite rising global bond yields, while the dollar weakened against its peers.

Index Performance

U.S. and International Equities

U.S. Equities: U.S. equities logged a record setting week as Wall Street bulls drove the S&P 500 into positive territory in every session this week. Weekly gains were relatively modest, but nonetheless stocks extended their rally off April lows as the second quarter earnings season kicked into high gear. Alphabet (GOOGL) and Tesla (TSLA) kicked off big tech reports with shares of the Google parent company trading higher this week on strong artificial intelligence (AI) product demand and bolstered spending plans, while TSLA slumped after delivering its largest revenue decline in roughly a decade.

Meanwhile, trade deal optimism broadly propped up sentiment across Wall Street after the White House announced levies on Japanese goods will be lowered to 15%, including automobiles, alongside Japan’s agreement to invest $550 billion in the U.S. and to reopen Tokyo’s market to American cars and rice. Market chatter at the macro level continued to provide a mostly positive backdrop with focus on U.S. macro resilience, the VIX Index falling further below 16, and the AI theme. Although markets took note of signs of a rotation toward lower-quality pockets of the market and another burst of meme-stock enthusiasm, as well as some speculation surrounding pain trades under the surface alongside the probability of a hawkish-leaning Federal Reserve (Fed) meeting next week.

International Equities: The European benchmark STOXX 600 posted measured gains over the last five days. Risk appetite was relatively subdued as investors dissected a flurry of corporate earnings reports, with highlights including a first-half net loss for automaker Stellantis, strong quarterly net income from budget airline Ryanair, strong reports from BNP Paribas and Deutsche Bank, while German software firm SAP missed revenue expectations and warned that cloud deal cycles have been extended due to trade uncertainties. Trade negotiations also remained in focus, leading investors to refrain from outsized bets, with officials from the European Union (EU) and Washington reportedly closing in on a deal. Elsewhere, the European Central Bank (ECB) held rates steady Thursday, as expected.

Major Asian markets moved higher this week, broadly lifted by trade deal enthusiasm. Japan led regional gains, shaking off post-election concerns after Prime Minister Ishiba’s incumbent party failed to secure the upper house majority. However, following Monday’s holiday, Japanese stocks traded narrowly mixed to suggest the election outcome was priced in by investors, before equities delivered a two-day rally after the White House and Tokyo announced a trade deal had been reached. Trade deals with Indonesia and the Philippines were also unveiled early in the week, lifting hopes a U.S.-China deal is just around the corner and powering Hong Kong’s Hang Seng index to multi-year highs. Mainland China also moved higher on the week, with the Shanghai Composite briefly eclipsing the 3,600-point mark. Taiwan and South Korea ended little changed while India declined modestly.

Fixed Income, Currency, and Commodity Markets

Fixed Income: The Bloomberg U.S. Aggregate Index traded higher this week amid mixed yields. The monetary policy rate-sensitive two-year yield ended roughly four basis points higher, while the 10-year yield ended three basis points lower. Corporate credit spreads, for both high yield and investment-grade markets, were lower on the week.

Global bond yields moved higher mid-week, with U.S. Treasury yields following the lead from the sell-off in Japan and Europe. Despite a solid 20-year Treasury auction on Wednesday, long-end yields continued to be pushed higher due to the slow unwinding of the Bank of Japan’s (BOJ) support for the Japanese government bond (JGB) market. Thursday morning, the yield on the 10-year JGB touched the highest level since 2008, with the 30-year JGB yield a whisker away from its all-time high reached earlier this month. The BOJ’s support of its bond market, one could argue, artificially kept global bond yields lower than what fundamentals would have suggested. Now, the BOJ is determined (at least in public) to allow its bond market to reprice, and that is taking global bond yields along for the ride. For institutional investors in Japan, it has been a painful transition. With the 30-year yield higher by roughly 0.79% year-to-date, bond investors are looking at close to a 25% unrealized loss on their holdings this year. Here in the U.S., Japan’s transition away from easy monetary conditions has put upward pressure on the 30-year, as well, but to a lesser extent, with the 30-year Treasury yield higher by 0.15% this year. Government bond markets are global in nature, and with Japanese investors large owners of U.S. Treasuries, the move higher in JGBs is making their home market more attractive, which likely means less demand for Treasuries from Japanese investors going forward.

Commodities and Currencies: The broader commodities complex traded lower over the last five days, measured by a decline in the Bloomberg Commodities Index. Falling crude prices dragged on the overall complex, deepening losses Friday on U.S. preparation to allow Venezuelan exports to increase — within activity limitations for partners of the state-run oil and natural gas company — as well as potential increased Iraqi exports via the reopening of the Iraqi-Turkey pipeline. Nonetheless, crude traders remained cautious this week with no policy changes expected at the upcoming OPEC+ meeting. Elsewhere, gold prices turned lower during Friday’s session, erasing mid-week gains as trade deal optimism pushed the yellow metal back within a consolidation range from a five-week high. Silver traded flat and copper advanced. In currencies, the U.S. dollar faced its worst week of the month as the dollar’s biggest trading pair, the euro, jumped over the last five days after ECB President Christine Lagarde suggested that policymakers’ rate cutting pause is likely to continue. The greenback did pare back week-to-date losses on Thursday and Friday after President Trump stated he will not fire Fed Chair Jerome Powell, easing concerns that compromised Fed independence would spur a dollar-denominated boycott from international investors.

Economic Weekly Roundup

The U.S. economic calendar was relatively light over the last five days. Highlights for the week included preliminary manufacturing, services, and composite Purchasing Managers’ Indexes (PMI) for the month of July. Services activity topped June’s final reading, with the composite index reaching its highest level of the year as strength in the services sector more than offset manufacturing activity facing its first contraction since December 2024. Nonetheless, despite the acceleration, survey results indicated ongoing trade-related concerns for business conditions as the composite measure of prices paid and prices received ticked higher, suggesting higher materials costs are being passed along to consumers to some degree. In a separate report released on Thursday, initial jobless claims declined slightly for the week ending July 19. Additionally, durable goods orders turned negative, as expected, based on preliminary June data from the U.S. Census Bureau.

The Week Ahead

The following economic data is slated for the week ahead:

• Monday: Dallas Fed Manufacturing Activity (Jul)

• Tuesday: Advance Goods Trade Balance (Jun), Wholesale Inventories (Jun preliminary), Retail Inventories (Jun), FHFA House Price Index (May), S&P CoreLogic U.S. and 20-City Home Price Indexes (May), JOLTS Jobs Report (Jun), Conference Board Consumer Confidence (Jul), Dallas Fed Services Activity (Jul)

• Wednesday: MBA Mortgage Applications (Jul 25), ADP Employment Change (Jul), GDP (2Q advance), Personal Consumption (2Q advance), Core PCE Price Index (2Q advance), Pending Home Sales (Jun), FOMC Rate Decision (Jul 30), Treasury Quarterly Refunding Announcement

• Thursday: Challenger Job Cuts (Jul), Personal Income (Jun), Personal Spending (Jun), Headline and Core PCE (Jun), Employment Cost Index (2Q), Initial Jobless Claims (Jul 26), Continuing Claims (Jul 19), MNI Chicago PMI (Jul)

• Friday: Change in Nonfarm, Private, and Manufacturing Payrolls (Jul), Average Hourly Earnings (Jul), Average Weekly Hours All Employees (Jul), Unemployment Rate (Jul), Underemployment Rate (Jul), S&P Global U.S. Manufacturing PMI (Jul final), ISM Manufacturing Report (Jul), Construction Spending (Jun), University of Michigan Consumer Sentiment Report (Jul final), Wards Total Vehicle Sales (Jul)

IMPORTANT DISCLOSURES

This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors. To determine which investment(s) may be appropriate for you, please consult your financial professional prior to investing.

Investing involves risks including possible loss of principal. No investment strategy or risk management technique can guarantee return or eliminate risk.

Indexes are unmanaged and cannot be invested into directly. Index performance is not indicative of the performance of any investment and does not reflect fees, expenses, or sales charges. All performance referenced is historical and is no guarantee of future results.

This material was prepared by LPL Financial, LLC. All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

Unless otherwise stated LPL Financial and the third party persons and firms mentioned are not affiliates of each other and make no representation with respect to each other. Any company names noted herein are for educational purposes only and not an indication of trading intent or a solicitation of their products or services.

Asset Class Disclosures –

International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. These risks are often heightened for investments in emerging markets.

Bonds are subject to market and interest rate risk if sold prior to maturity.

Municipal bonds are subject and market and interest rate risk and potentially capital gains tax if sold prior to maturity. Interest income may be subject to the alternative minimum tax. Municipal bonds are federally tax-free but other state and local taxes may apply.

Preferred stock dividends are paid at the discretion of the issuing company. Preferred stocks are subject to interest rate and credit risk. They may be subject to a call features.

Alternative investments may not be suitable for all investors and involve special risks such as leveraging the investment, potential adverse market forces, regulatory changes and potentially illiquidity. The strategies employed in the management of alternative investments may accelerate the velocity of potential losses.

Mortgage backed securities are subject to credit, default, prepayment, extension, market and interest rate risk.

High yield/junk bonds (grade BB or below) are below investment grade securities, and are subject to higher interest rate, credit, and liquidity risks than those graded BBB and above. They generally should be part of a diversified portfolio for sophisticated investors.

Precious metal investing involves greater fluctuation and potential for losses.

The fast price swings of commodities will result in significant volatility in an investor's holdings.

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