Mid-Year 2025 Investment Market Review: Staying the Course Amid Headlines and Volatility
As of June 30, 2025, global financial markets have continued to reward patient investors, even as headlines throughout the first half of the year have been dominated by economic uncertainty, shifting interest rate expectations, and geopolitical concerns. Despite short-term turbulence, disciplined investors who remained committed to their long-term financial plans have generally seen positive results across most major asset classes.
U.S. Equities – S&P 500 Reaches New Highs
The S&P 500 price index rose 5.5% year-to-date, reflecting ongoing strength in large-cap U.S. equities. Technology and communication services led the advance, driven by strong corporate earnings, enthusiasm around artificial intelligence, and improved productivity metrics. While inflation readings have remained somewhat elevated, they have not derailed corporate profitability or consumer resilience.
Mid- and small-cap stocks posted more modest gains, partially weighed down by tighter credit conditions and slower domestic growth, but still contributed positively to diversified portfolios.
Fixed Income – A Stabilizing Bond Market
After a difficult 2022 and a volatile 2023-2024, the U.S. bond market has stabilized in 2025. The Bloomberg U.S. Aggregate Bond Index is up 4.0% year-to-date, reflecting improving sentiment and declining rate volatility. The Federal Reserve held interest rates steady through most of the first half of the year, signaling a cautious but data-dependent stance. Intermediate- and long-term Treasury yields have eased slightly, contributing to positive returns across investment-grade bonds.
International Markets – Opportunities Abroad
Developed international equities (as measured by the MSCI EAFE Index) returned 13.7 year-to-date, benefiting from a weaker dollar, improving European economic sentiment, and easing energy costs.
The Importance of Staying Focused
The first half of 2025 has been a reminder of a timeless investment truth: markets and headlines rarely move in the same direction. Economic concerns—from inflation worries and tariff uncertainty to ongoing international tensions—can tempt investors to react emotionally.
But successful investing rarely rewards reactivity. Instead, staying anchored to a long-term financial plan—built around your specific goals, risk tolerance, and time horizon—is the best defense against short-term noise and volatility.
Looking Ahead
The remainder of 2025 will likely bring its share of surprises, both positive and negative. Whether it’s evolving Federal Reserve policy, global elections, or new developments in technology and trade, markets will continue to digest change. History has shown that trying to time markets or react to every headline is more likely to hurt long-term results than help them.
As always, we remain committed to helping you navigate these changes with clarity and confidence. Thank you for your continued trust.
| Key Index Returns |
YTD%
|
| Dow Jones Industrial Average |
3.6
|
| Nasdaq Composite |
5.5
|
| S&P 500 Index |
5.5
|
| Russell 2000 Index |
-2.5
|
| MSCI World ex-USA** |
17.0
|
| Bloomberg US Agg Total Return |
4.0
|
Source: Wall Street Journal, MSCI.com, Bloomberg, MarketWatch, YTD returns: December 31, 2024–June 30, 2025, **in US dollars
The views stated in this piece are not necessarily the opinion of Cetera Advisors LLC and should not be construed directly or indirectly as an offer to buy or sell any securities. Due to volatility within the markets, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results. Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.
The Bloomberg U.S. Aggregate Total Return Value Unhedged Index, also known as “Bloomberg U.S. Aggregate Bond Index” formerly known as the “Barclays Capital U.S. Aggregate Bond Index”, and prior to that, “Lehman Aggregate Bond Index”, is a broad-based flagship benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. The index includes Treasuries, government-related and corporate securities, MBS (agency fixed-rate pass-throughs), ABS and CMBS (agency and non-agency).
The MSCI EAFE Index is designed to measure the equity market performance of developed markets (Europe, Australasia, Far East) excluding the U.S. and Canada. The Index is market-capitalization weighted.
The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe and is a subset of the Russell 3000 Index representing approximately 10% of the total market capitalization of that index. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.
The MSCI All-Country World Ex-U.S. Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of developed and emerging markets, but excludes the United States. The SMCI ACWI consists of 45 country indexes comprising 22 developed and 23 emerging market country indexes. The developed country indexes include: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, and the United Kingdom. The emerging market country indexes included are: Brazil, Chile, China, Colombia, Czech Republic, Egypt, Greece, Hungary, India, Indonesia, Korea, Malaysia, Mexico, Peru, Philippines, Poland, Qatar, Russia, South Africa, Taiwan, Thailand, Turkey and United Arab Emirates.
Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.