DFG Navigator Archives | July 2025

Your Capital Markets Snapshot: U.S. Capital Markets Continued Strong Upward Momentum

Last week, U.S. capital markets continued their strong upward momentum, with the S&P 500 and Nasdaq reaching new all-time highs. This rally was fueled by a combination of easing geopolitical tensions in the Middle East, falling oil prices, and a robust performance from mega-cap tech stocks. A better-than-expected U.S. jobs report also boosted investor sentiment, showing 147,000 new jobs added in June and a slight drop in the unemployment rate to 4.1%. However, the labor force participation rate declined, and private sector hiring was relatively soft, tempering some of the optimism. Markets also responded positively to a new U.S.-Vietnam trade agreement, which provided clarity on tariffs despite higher rates than previously expected. Meanwhile, Congress passed a significant tax and spending bill, which is expected to offer a modest economic boost in 2026 but raises concerns about long-term federal debt. Bond yields rose as the strong jobs data reduced expectations for imminent Fed rate cuts, with the 2-year Treasury yield climbing notably. Overall, while bullish momentum remains strong, markets may face volatility ahead due to potential trade developments and overbought conditions.

Your Capital Markets Snapshot: US Equity Markets Surged

US equity markets surged as the S&P 500 and Nasdaq both climbed over 3% and posted record highs. Megacap technology stocks led the charge, driven by strong earnings and AI-related optimism. The broader rally was partially fueled by easing geopolitical tensions in the Middle East, which led to a sharp drop in oil prices. U.S. crude fell from over $75 to around $65 per barrel. This decline helped ease inflation concerns and supported consumer sentiment. Meanwhile, the Federal Reserve signaled a continued path toward rate cuts, with markets now pricing in two to three cuts by year-end. Increased expectations of lower long-term rates helped further boost equity valuations. However, trade tensions resurfaced late in the week as the U.S. abruptly ended talks with Canada over a digital services tax, triggering some intraday volatility.

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