As we enter the second half, markets remain shaped by persistent uncertainty—ranging from shifting US trade policy and fiscal debates to evolving geopolitical risks and the ongoing impact of structural trends like AI and longevity.

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What happened in 1H25?

A strong start meets early turbulence

Markets began 2025 with optimism, supported by steady growth, positive earnings surprises, and hopes for central bank rate cuts..

Policy shocks drive volatility

This confidence faded in March as a sharp escalation in US tariffs triggered the steepest equity correction since the pandemic. The S&P 500 dropped 10.5% in two days, volatility spiked, and the US dollar weakened.

Resilience returns

Markets quickly rebounded as some tariffs were paused and AI-driven earnings remained robust. By June, most major indices had recovered to near their highs.

Ongoing uncertainty and shifting leadership

Policy and geopolitical risks persist. US equities have lagged global peers, the dollar remains soft, and long-term US yields are still elevated, challenging the idea of US market dominance.

Key lesson: stay disciplined

The first half of the year reinforced that patience and a long-term approach are rewarded—proving that preparation is crucial to navigating ongoing uncertainty.

Key drivers for 2H25

Greater clarity on US trade and fiscal policy

Investors under-allocated to equities should consider phasing into markets in 2025 to prepare for stronger performance in 2026.

Persistent geopolitical risk

Investors should respond to heightened geopolitical uncertainty by considering portfolio hedges, including gold.

Lower bond yields and interest rates

With lower interest rates materializing, or on the horizon, investors should identify opportunities to seek durable income.

Ongoing de-dollarization

Investors should review currency exposures, and consider hedging or diversifying where exposures don't match with their long-term goals.

Development of structural growth trends

Investors should develop a core allocation to structural growth industries, key drivers for global markets in the years ahead.

How to invest and plan ahead

Explore our top investment ideas to help you navigate second half of 2025

Want to learn more?

Download our 2H25 outlook

Are you looking for more information?

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