Monthly Observations - August 2025

By Chris Zaccarelli

Monthly Observations

The S&P 500 rose 1.5% in July, continuing its recovery. The MSCI All Country World index rose 1.2% in July, improving its year-to-date return to 5.4%. The Bloomberg BarCap U.S. Aggregate Bond index rose 0.5% during July, which increased its year-to-date gain to 4.3%.

Markets continued their gradual recovery in July as trade negotiations progressed and corporate earnings came in better than expected. The Federal Reserve held interest rates steady again, but markets continued to price in future rate cuts. The second quarter earnings season showed that most companies were able to absorb the tariff headwinds and continue growing their profits.

Monthly Highlights

Corporate earnings beat expectations despite tariff headwinds

Trade negotiations continued to progress with several countries

The Federal Reserve held rates steady as inflation remained contained

News in Review

Below are some stories that caught our eye this past month. To learn more, follow the links to the full article.

Corporate Earnings Beat Estimates Despite Tariff Concerns

The second quarter earnings season produced better than expected results for most companies, with many large corporations reporting that they were able to pass on tariff costs to consumers or find alternative supply chains. The resilience of corporate America in the face of tariff headwinds was a positive sign for investors.

US Reaches Trade Framework Agreement with Japan

The US and Japan announced a framework agreement on trade that would reduce tariffs on key goods and provide a roadmap for further trade liberalization. Japan is one of the largest US trading partners and the deal was seen as a significant step in the broader effort to resolve the tariff disputes that have been weighing on global trade.

Inflation Remains Contained Despite Tariff Pressures

Despite concerns that tariffs would cause a significant increase in inflation, the most recent data showed that inflation remained relatively contained. The Federal Reserve's preferred measure of inflation remained close to their 2% target, giving them flexibility to cut rates if the economy slows down.

Family Finds 100-Year-Old Love Letters Hidden in Walls During Home Renovation

A family renovating their century-old home discovered a cache of love letters hidden inside the walls. The letters, which date back to the 1920s, tell the story of a young couple's romance during a turbulent period in history. The family has been sharing the letters online and has received an outpouring of interest from people around the world.

DISCLOSURES

Securities offered through LPL Financial, Member FINRA/SIPC. Blackbridge Financial is another business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial. The opinions expressed in this material do not necessarily reflect the views of LPL Financial.

This newsletter was written and produced by the Independent Advisor Alliance, LLC. Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly. The views stated in this letter should not be construed directly or indirectly as an offer to buy or sell any securities mentioned herein. Due to volatility within the markets mentioned, opinions are subject to change without notice. Information is based on sources believed to be reliable; however, their accuracy or completeness cannot be guaranteed. Past performance does not guarantee future results.

S&P 500 INDEX: The Standard & Poor's 500 Index is an unmanaged, capitalization-weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries.

NASDAQ 100 INDEX: The Nasdaq 100 Index is an unmanaged, capitalization-weighted index of the largest 100 non-financial stocks traded on the Nasdaq market. Unlike the S&P 500 it does not represent all major industries and may be more volatile than more broadly constructed indices.

MSCI ACWI INDEX: The MSCI ACWI captures large- and mid-cap representation across 23 developed markets (DM) and 24 emerging markets (EM) countries. With 2,495 constituents, the index covers approximately 85% of the global investable equity opportunity set.

Bloomberg U.S. Aggregate Bond Index: The Bloomberg U.S. Aggregate Bond Index is a broad-based index of the U.S. investment-grade, fixed-rate bond market, including both government-related and corporate securities and mortgage-backed and asset-backed securities.

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