Looking Back
How Did Markets Perform Last Quarter?
S&P 500
10.6%
10.6%
The broad market index notched a new record high during a stellar quarter.1
NASDAQ
17.8%
17.8%
The tech-focused NASDAQ soared as investors regained their optimism.1
DOW 30
5.0%
5.0%
The blue-chip Dow grew with the broader market, turning in a solid performance.1
Looking Ahead
What factors may influence markets in the months to come?
We may be facing economic headwinds in the second quarter, and markets are likely to remain volatile as investors digest news and look for clarity. Let's take a look ahead at some of the factors that we'll be watching in the weeks and months ahead.
Tariffs
Despite months of negotiations, the actual implementation of tariffs remain unclear and the uncertainty continues to weigh on investor expectations.2
Economic Growth
The U.S. economy contracted in the first quarter, slowing more than expected. However, current estimates suggest that growth rebounded in Q2.3
Labor Market
While headline job numbers appear solid, a closer look at the data reveals signs of weakness that could affect the economy. We'll be watching the trends closely.4
Interest Rates
Investors still expect the Federal Reserve to cut interest rates. If the Fed holds to its rate-cutting plan, it could indicate optimism about the economy. On the other hand, a continued pause could signal that policymakers fear a return of inflation.5
Watch as the Chief Investment Officer of SEI reviews the financial markets for the second quarter.
"Positive quarters are welcome, but they're just one chapter in a much longer story. Patience and perspective matter."
"Positive quarters are welcome, but they're just one chapter in a much longer story. Patience and perspective matter."
Bottom Line
Key Takeaways for Savvy Investors
What should we make of this remarkable turnaround after Q1's volatility?
Markets defied expectations, but the rally raises some questions. Q2's strong performance shows markets can bounce back quickly. But this rebound happened against a background of persistent tariff uncertainty and economic growth worries.
Economic fundamentals may be telling a different story. The economy actually shrank in Q1, and the labor market may be showing underlying weakness.
Are investors getting ahead of themselves? It's hard to say, but we're watching carefully. While data suggests economic growth could have rebounded in Q2, we're watching closely.6 The disconnect between soaring markets and mixed economic signals creates an environment where surprises (positive or negative) could drive significant volatility.
Policy wildcards remain in play. Trade policy keeps evolving unpredictably after months of negotiations, while Fed decisions will likely hinge on incoming data. Markets may react quickly to policy surprises, particularly if tariff policy gains clarity or if the Fed shifts course on interest rates.
Our outlook: optimism with vigilance. Market resilience gives us encouragement entering Q3, but we're keeping a watchful eye on economic indicators and policy developments closely.
Questions about markets or your portfolio? Please reach out—I'd be happy to discuss.
Mahesh Odhrani, CFP®, ChFC®, AIF®, CPFA®
Strategic Wealth Design
Sources:
- Reuters, 2025 [URL: https://www.reuters.com/business/sp-500-nasdaq-futures-climb-record-highs-trade-optimism-2025-06-30/]
- CNBC, 2025 [URL: https://www.cnbc.com/2025/07/07/stock-market-today-live-updates.html]
- CBS News, 2025 [URL: https://www.cbsnews.com/news/gdp-report-first-quarter-2025-declined-commerce-department/]
- Reuters, 2025 [URL: https://www.reuters.com/world/us/us-job-growth-expected-slow-june-unemployment-rate-forecast-rise-2025-07-03/]
- Goldman Sachs, 2025 [URL: https://www.goldmansachs.com/insights/articles/why-the-fed-may-cut-rates-earlier-than-expected]
- Federal Reserve Bank of Atlanta, 2025 [URL: https://www.atlantafed.org/cqer/research/gdpnow]
The S&P 500 is a stock index considered to be representative of the U.S. stock market in general. The NASDAQ Composite Index is an unmanaged composite index of over 2,500 common equities listed on the NASDAQ stock exchange. The Dow Jones Industrial Average is a price-weighted index that tracks 30 large, publicly traded American companies.
All index returns exclude reinvested dividends and interest. Indices are unmanaged and cannot be invested into directly.
Advisory services offered through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Strategic Wealth Design and Cambridge are not affiliated. SEI and Cambridge are not affiliated.