Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US and Asia.
Key market events
⏱️ Tariff deadline comes and goes – the 1st of August deadline to strike trade deals with the US passed on Thursday night. Countries without a deal face higher levies, including Canada - which was hit with a 35% tariff. Other key agreements, including the EU (see below) were in place before the deadline. China still has until 12th August to agree a deal.
⏳ EU and US reach a last-minute deal – late on Sunday the US and EU agreed a deal to reduce tariffs on EU goods into the US to 15%, avoiding the steeper 30% rate announced by Trump on Liberation Day. This is in addition to EU investment in the US, and is similar to the deal agreed between the US and Japan last week.
📈 Strong growth in the US – the US economy grew at an annualised rate of 3% in Q2 - comfortably beating the 2.4% expected and a sharp rebound from the 0.5% contraction in Q1. While positive, the numbers were skewed due to swings in imports caused by tariff uncertainty.
📊 US Federal Reserve (FED) holds rates steady – for the fifth meeting in a row, the US central bank kept interest rates at 4.25-4.5%. Tariff uncertainty and inflationary pressures are still more of a concern for policymakers than potential weakening in the labour market or economic growth. As such, expectations for a rate cut in September were scaled back.
💰 Big tech earnings – both Microsoft and Meta announced strong earnings results, propelling the 'Magnificent 7' stocks ever higher. Largely due to the performance of these companies, US markets reached record highs.
What this means for financial advisers and clients
While tariff tensions have sparked concern about the global economy, markets have until now remained resilient, with Q2 seeing a continued recovery after the sell off in early April. The passing of the 1st August deadline has caused uncertainty, however.
As more trade deals are agreed and a number of the initial, headline grabbing tariffs are negotiated to lower levels, markets appear to have been looking through the potential impact. Strong US growth - even if partly skewed due to the tariffs - and strong tech earnings, have continued to push markets higher.
Chart of the week - AI momentum continues
Source: Bloomberg, July 2025
Why this matters
The ‘Magnificent 7’ US tech stocks have helped to push the US markets to record highs this year, despite worries around Donald Trump’s implementation of tariffs.
Much of this performance has been driven by excitement around AI, which first started in 2022 with the release of OpenAI’s ChatGPT. The companies within the 'Magnificent 7' with the greatest exposure to AI - namely Microsoft, Meta and especially Nvidia - have benefitted the most from this excitement.
The chart above shows their performance has been a major reason for the rise in the S&P. However, given their large weighting in the index, this could be a risk going forwards if earnings fail to meet expectations.
Market recap
UK - blue chips fly
The FTSE 100 reached new record highs during the week, boosted by strong corporate earnings from the likes of Barclays and Rolls Royce. The mid cap FTSE 250 index declined over the week but has had a strong second quarter.
US - record highs
Both the S&P 500 and Nasdaq reached fresh highs during the week, fuelled by strong US growth and continued momentum from the ‘Magnificent 7’ technology companies.
Europe - earnings wobble
Despite progress on trade, European markets were down over the week. This was due to ongoing uncertainty as well as some disappointing earnings, particularly in the luxury sector. The euro also declined marginally versus sterling which reduced returns for GBP investors.
China - trade tensions drag confidence
Ongoing trade uncertainty with the US and relatively sluggish Purchasing Managers’ Index (PMI) numbers led to a decline in the Hang Seng index.
Oil - price surge
Brent crude oil enjoyed a strong week gaining 6.83%, largely on the back of supply concerns. Tensions rose after Trump threatened to impose 100% secondary tariffs on countries - including India and China - that continue to buy Russian oil.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 0.17% | 14.22% |
| FTSE 250 | -0.68% | 8.81% |
| S&P 500 | 0.72% | 2.54% |
| NASDAQ | 1.27% | 4.88% |
| MSCI Europe ex UK | -2.28% | 14.55% |
| Hang Seng | 0.23% | 20.05% |
| Nikkei 225 | -1.68% | 2.12% |
| Brent Crude | 6.83% | -9.04% |
| Gold Spot | 0.23% | 19.75% |
| UK 10yr Gilt yield | -5bps | +1bps |
| US 10yr Treasury yield | -3bps | -21bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 31st July 2025.
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This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
