July 2025 saw the US equity rally broaden and consolidate, with major indices holding near record highs as resilient corporate earnings, stabilizing economic data, and further de-escalation in global conflicts supported risk appetite. While gains were less dramatic than in June, the S&P 500 and Nasdaq remained in positive territory, bolstered by continued leadership from megacap tech and AI stocks and a rebound in small and mid-cap shares. The Federal Reserve maintained a cautious tone, keeping rates steady as inflation showed tentative signs of moderation and the labor market stabilized after June’s soft patch. Market participants grew more optimistic about a potential rate cut in the second half of the year, especially with consumer spending steadying and housing data firming, driving additional flows into rate-sensitive and cyclical sectors. Global markets navigated lingering tariff uncertainties and mixed signals from China’s economy, but diminished volatility and resolution of several geopolitical flashpoints—such as the aftermath of the Iran-Israel truce—contributed to steady inflows into US assets. Bond markets saw modest declines in yields, and defensive moves by institutional investors eased as fears over fiscal deficits temporarily subsided. July’s mood was one of resilience: While remaining alert to fiscal, political, and external risks, investors drew confidence from solid US corporate performance, a steady macro outlook, and the receding specter of trade and geopolitical shocks.