Weekly Market Update (July 20, 2025)

Market Hedwig
Jul 20
2 min read

HIGHLIGHTS

S&P500 continued to rise this week, mainly driven by solid earnings. The focus in the coming week would be Japan’s election, ECB meeting, and more corporate earnings.

Tariffs: Focus returned to tariffs after the higher rates were announced. Markets are looking through tariff hikes and focusing on economic and earnings growth. Although most market participants believe the proposed high rates are unlikely to take effect next month, they revised the tariff assumption to a slightly higher final tariff rate.

Fed: Sources indicated a draft of dismissal letter of Fed Chair Powell. Previously, Trump expressed his dissatisfaction with the rate policy. Markets reacted to the headlines with a move into assets that are defensive, including gold and treasury.

Economy: US activity remains resilient while inflation regains traction. GDP growth in Q2 and Q3 is raised. In Europe, the multiannual budget proposal indicated they prioritize defence at the expense of cohesion and agriculture.

MARKETS

Nasdaq	20,895.66	+1.51%
S&P 500	6,296.79	+0.59%
Dow	44,342.19	-0.07%
10-Year	4.43%	+1bps
Brent	69.28	+1.53%
DXY	98.46	+0.60%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

Morgan Stanley: Equity markets hit all-time high again. We believe it is partially premised on expectations of Fed easing over the next year, with as many as 5 cuts priced into the forward interest rate swap curve.

Standard Chartered: We expect earnings in US beats and the trade deals will drive global risk assets higher in the coming weeks. We suggest to use recent USD rebound to trim any excessive US equities and rotate to markets such as Asia ex-Japan equities.

Fixed Income

Goldman Sachs: The current economic backdrop is favorable for US duration. We expect US yields to move lower across the curve. The market-implied Fed path is on the hawkish side.

UBS: Aggressive rate cut may not lead to a lower bond yield, as market participants could start pricing in more inflation risks. If it happens, it would adversely affect the global reserve currency role of US dollar.

Economy

Goldman Sachs: Recent economic data reflected that the impact of tariffs is becoming smaller on inflation, jobs and consumer spending than previously. Retail sales and jobless claims reported better than expected.

Morgan Stanley: The One Beautiful Bill Act is one of the bullish narratives because of the corporate stimulus. It is favorable to R&D expenses, capital spending bonus depreciation and higher cap on interest expenses deductibility.

KNOWLEDGE TRANSFER

GLP-1

Here's all you need to know about the Game-Changing Obesity Drugs.

DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.