We’re Halfway Through 2025 — How Are Stocks Holding Up?
Today is the 183rd day of 2025, meaning we’re officially halfway through the year. But for all its twists and turns, investors might feel like we’ve already lived a full year in only the first six months.
Why? Well, just yesterday (April), we were facing a bear market thanks to Trump’s ‘tariff inquisition’ and shaky trade talks. But stocks have come all the way back from the depths, wrapping Q2 in fantastic fashion. It might be a sign of things to come.
Midway check-in: The S&P 500 and Nasdaq 100 notched all-time highs in the lead-up to the end of Q2 — rallying 24% and 31% respectively from their Apr. 8 lows. Those came amid worries about tariffs, “uncertainty,” and negative economic data readings. But despite those concerns, investors are bidding on a wide array of stocks — not just the Mag7, but many different sectors — and promising to usher the rally in US stocks higher.
- Investors are enthused by less volatility and promising Trump trade developments entering July, which Goldman Sachs researchers say is the “strongest month” historically for the S&P 500.
- With the Fed still expected to cut rates twice this year, investors are anticipating more upside in the S&P and Nasdaq — up 5.8% and 7.4% YTD — as well as in long-stagnant small and mid-caps in the Russell 2000 (-1% YTD).
Dollar Tumble
In our monthly Bear & Bull survey, 66% of readers described themselves as ‘Bullish’, lending credence to a continuing rally. However, investors should be aware that stock strength is masking risks tied to the Dollar and Treasurys — both of which could deliver surprises.
- Despite the market comeback, the US Dollar hasn’t recovered since Trump’s Liberation Day announcement — down 10% in the first half of 2025.
- Confidence in the Dollar and Treasurys is slipping, not just because of the tariff tiff, but due to a deeper fiscal credibility issue, worsened by the go-ahead on the GOP tax and budget bill.
True value: Even with stocks rebounding, the weaker Dollar has steepened the losses relative to other global peers and assets — meaning many investors still have a long way back to ‘get even’ after a tumultuous first half. Thankfully, plenty seem willing to saddle the risk, betting on the comeback trade (and an eventual Dollar rebound) to define the second half of the year.