June Market Commentary 2025
June 25, 2025 | Luke WrightLuke WrightThis commentary covers the significant challenges faced by the global economy during March, April, and May 2025, shaped by a complex interplay of policy decisions, trade tensions, and fluctuating market conditions. A major influence during this period was President Trump’s sweeping tariff measures, which disrupted global trade relations by imposing considerable pressure on export-reliant industries. These tariffs not only altered supply chains but also intensified inflationary pressures in certain markets, compelling businesses to reassess their strategies for maintaining competitiveness amidst rising costs and reduced demand.
Monetary policy played a crucial stabilising role throughout this period, with central banks adopting measured strategies to address evolving economic uncertainties. The Federal Reserve maintained its data-driven focus, refraining from immediate rate cuts in light of mixed signals from the economy. Similarly, the European Central Bank implemented accommodative measures, including a 25-basis-point rate reduction in April, to mitigate the impact of trade disruptions. Meanwhile, the Bank of England cut interest rates from 4.5% to 4.25%, the lowest rate since May 2023, cautiously assessing the lingering effects of inflation and tariff-related pressures on the domestic economy.
Global equity markets reflected the diverse economic landscape, presenting a blend of resilience and vulnerability. Technology and defensive sectors, such as consumer staples and utilities, emerged as standout performers, bolstered by stable demand and innovation. Conversely, the energy and industrial sectors faced challenges due to weaker commodity prices and disrupted supply chains. The FTSE 250 index in the UK demonstrated relative strength, sustained by robust domestic demand, while the broader FTSE 100 index encountered headwinds from trade-dependent multinationals.
The economic outlook during these three months was cautiously optimistic but tempered by significant challenges. The easing of headline inflation, driven by stabilising energy and food prices, provided some relief; yet, persistent core inflation and ongoing geopolitical tensions continued to cast shadows over global growth prospects. Emerging markets presented a mixed picture, with Southeast Asia and India maintaining robust growth trajectories, while China and Turkey grappled with trade-induced pressures and domestic imbalances.
This market commentary provides an overview of the latest developments shaping global markets during this critical period, highlighting the implications of trade policies, sector-specific performance dynamics, and central bank strategies. Its aim is to equip readers with the insights necessary to understand the interconnected forces driving market trends and to identify opportunities within a volatile economic landscape.
For policymakers, investors, and business leaders alike, the period from March to May 2025 highlighted the necessity for adaptability and foresight. By examining the most pressing economic themes and their implications, this commentary serves as a valuable resource for navigating a world characterised by constant change and complexity.
