July 28, 2025 •Nathan Willis
Key Events: Tariff deal accomplished
The United States finalized a tariff agreement with the European Union, imposing a 15% levy on most EU exports. In parallel, it extended its tariff truce with China and established a framework for a future trade deal with Japan.
On the domestic front, the labor market remains resilient, and second-quarter earnings season is off to a strong start—nearly one-third of S&P 500 companies have reported, with 80% delivering positive surprises and maintaining robust profit margins.
Market Review: More all-time highs
The S&P 500 managed to set a new high each day last week, finishing 1.5% higher, while international stocks also performed well. Bonds held onto slight gains as soft inflation and good labor market data set the stage for an accommodative Federal Reserve.
Outlook: All eyes on the Fed
Following a week of calmer economic data, investor attention is likely to shift toward the Fed’s upcoming remarks and any signals around timing for the first rate cut. With inflation still trending downward and payroll data holding steady, the Fed’s dual mandate appears to be intact despite the wild-card of tariff uncertainty. Fed officials continue to emphasize patience, with recent speeches suggesting growing alignment with the consensus for two rate cuts this year. Bond yields remain anchored, reinforcing a sense of balance between inflation concerns and labor market fragility.
Equity markets are holding their post-recovery gains, following a historical pattern illustrated in the chart below. Despite uncertainty, investors should stay on course but maintain discipline. While valuations in certain sectors are stretched, pockets of opportunity remain. Diversification and adherence to your long-term strategy are key to success.
Stocks have seen strong gains after recovering from a bear market to regain all-time highs[1]
OneAscent Navigator Outlook: July 2025
This material is intended to be educational in nature , and not as a recommendation of any particular strategy, approach, product or concept for any particular advisor or client. These materials are not intended as any form of substitute for individualized investment advice. The discussion is general in nature, and therefore not intended to recommend or endorse any asset class, security, or technical aspect of any security for the purpose of allowing a reader to use the approach on their own. Before participating in any investment program or making any investment, clients as well as all other readers are encouraged to consult with their own professional advisers, including investment advisers and tax advisors. OneAscent can assist in determining a suitable investment approach for a given individual, which may or may not closely resemble the strategies outlined herein.[2]
[1] Source: Bloomberg, OneAscent Investment Solutions. The chart illustrates the returns in the 12-months following the day the market regained its all-time high after the 12 most significant bear markets of the last 50 years. The S&P 500 recovered its high on June 27, 2025 and has gained another 3.5% in the month since.
[2] Market Returns reference the following indices: Large Cap – S&P 500, Mid Cap Growth – Russell Midcap growth, Mid Cap Value – Russell Midcap Value, Small Cap – Russell 2000, Developed – MSCI EAFE, Emerging – MSCI Emerging Markets, Aggregate – Bloomberg US Aggregate, High Yield – Bloomberg High Yield
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