Stocks and bonds rally despite trade turmoil: Q2 roundup | Capital Group

15 July 2025

Global stocks advanced in a volatile quarter marked by erratic trade policy, surging technology stocks and a ceasefire in the Iran-Israel war. The quarter opened with a wave of new U.S. tariffs, sending stocks sharply lower, and ended with a powerful rally as some levies were paused and global trade negotiations progressed.

Information technology stocks rallied, supported by renewed enthusiasm for advancements in artificial intelligence. AI-related stocks such as chip maker NVIDIA and software giant Microsoft were among the biggest gainers for the quarter. Energy stocks slipped on lower oil prices, and health care stocks came under pressure amid a proposal to lower U.S. prescription drug costs.

Bonds generally posted solid gains. U.S. Treasuries advanced amid market expectations that the Federal Reserve would begin cutting interest rates as soon as its July meeting. European bonds rallied as the European Central Bank slashed its key policy rate for the eighth time in the past 12 months.

Our latest insights

Why security is a durable investment theme

Envisioning a post-Powell Fed: What comes next?

Bond outlook: Income potential intact as economic risks rise

Stock market outlook: New growth catalysts amid volatility

Economic outlook: Higher uncertainty, lower growth

New catalysts spur global stocks

Past results are not predictive of results in future periods. It is not possible to invest directly in an index, which is unmanaged. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.

Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organisation; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.