News & Insights

August 2025 – Market Update

By James Timpson CFA

5 Aug 2025

Investment Market Commentary

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Global equity markets enjoyed another positive month in July with the MSCI World local currency index posting a further 2% gain, bringing its total return for the year to date to nearly 9%. Investor sentiment was buoyed by announcements of numerous US trade agreements, reducing the risk of an escalating trade war, and strong earnings updates particularly in the US.

In the UK, inflation data for June came in hotter than expected with the consumer prices index rising from 3.4% to 3.6% versus expectations it would remain flat. Meanwhile unemployment rose to 4.7%, its highest level in four years. Despite the weak macroeconomic data, UK large-cap stocks performed strongly during the month, boosted by a rebound in the US dollar, leading the FTSE 100 index to surpass the 9,000 mark for the first time.

Full round-up of July market performance

In the UK, the FTSE 100 index gained +4.31% while medium and smaller companies, measured by the FTSE 250 ex IT index and the FTSE Small Cap ex IT index respectively, returned 1.08% and -0.87%. In the US, the S&P 500 USD index rose 2.24% while in Europe the Eurostoxx 50 EUR index gathered 0.47%. Japanese stocks measured by the Topix JPY index grew 3.17%.

Emerging markets returns were mixed, with the MSCI Emerging Markets index returning 3.44% in local currency terms. Chinese stocks measured by the MSCI China CNY index surged 4.89%. However Indian stocks measured by the Nifty 50 INR index declined 2.93% and Latin American equities measured by the MSCI Latin America local currency index fell 2.91%.

In the fixed income market, UK government bonds, measured by the FTSE Gilts All Stocks index, slipped 0.30% with long dated (over 15 years to maturity) gilts declining 1.15%. Sterling denominated corporate bonds, measured by the Markit iBoxx Sterling Corporates index, rose 0.37%. In the high yield market, the ICE Bank of America Sterling High Yield index increased 1.74%.

In the commodities market, the S&P GSCI USD index, which consists of a basket of commodities including oil, metals and agricultural items, gained 3.62%. Brent crude oil futures rallied 6.37% during the month. In the precious metals markets, the S&P GSCI Gold and Silver indices returned -0.06% and 1.87% in USD respectively, while in the agricultural markets corn and wheat futures slumped 6.30% and 1.04% in USD respectively.

In currency markets, the pound depreciated 3.82% against the US dollar and 0.70% versus the euro but gained 0.65% against the Japanese yen.

James Timpson CFA Head of Asset Management

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