Markets remained remarkably calm over the past few weeks, even as inflation edged higher and central banks showed growing internal debates. The S&P 500 and Nasdaq continued their climb, with the Nasdaq hitting multiple record highs driven by renewed strength in the tech sector, especially chipmakers like Nvidia.1 In fact, by late July, the S&P 500 had logged 10 record closes in a single month, a feat not seen since August 2021.2
Bond markets reflected investor caution as yields stabilized. While immediate rate-cut expectations persisted, analysts now foresee longer-term U.S. Treasury yields drifting upward due to tariff-driven inflation and increased government debt.3 This cautious tone was also reflected overseas.
On the economic front, inflation may be showing signs of acceleration. The July CPI is expected to show a rise to 2.8% year-over-year, with core inflation climbing to around 3.1%—the highest in several months and possibly influenced by tariffs.4 This puts added pressure on central banks, which now face a delicate balance between managing inflation and supporting growth. Notably, both the Fed and the Bank of England are experiencing unusual internal divisions over policy direction.5
Commodities showed mixed performance. Gold-oriented funds dipped roughly 2.1% in July, though they remain significantly ahead for the year (up nearly 49%). Other markets, such as oil, remained volatile given supply dynamics, but there were no new major shifts reported in the period.
Investor sentiment refined slowly over the month. U.S. stock funds delivered about +1.7% in July, led by mega-cap growth names, while international funds pulled back slightly.6 Overall, markets absorbed inflation pressures and trade-related risks with surprising composure.
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Investor Takeaway
The markets have been steady, supported by strong tech earnings and measured optimism on trade, yet inflation and policy disagreements among central banks signal underlying uncertainty. With core inflation rising and rate-cut expectations shifting, investors should keep an eye on upcoming inflation data, yield trajectories, and central bank decisions.
- https://apnews.com/article/ae7c307ff31e5dc388b131e480030555 ↩︎
- https://www.raymondjames.com/-/media/rj/dotcom/files/advisor%20opportunities/monthly-strategy-snapshot ↩︎
- https://www.reuters.com/business/poll-tariff-inflation-worry-debt-deluge-prop-up-longer-term-us-treasury-yields-2025-08-11/ ↩︎
- https://apnews.com/article/4ef33f5d80572129874f9991dc8209 ↩︎
- https://www.marketwatch.com/story/its-a-new-era-of-central-bank-dissent-and-with-a-whiff-of-stagflation-in-the-air-thats-not-likely-to-change-aec43642 ↩︎
- https://www.wsj.com/finance/stocks/stock-funds-gains-july-c5f62ce9 ↩︎
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