Global shares gained in July amid greater clarity on trade tariffs as the 1 August deadline approached. Emerging market shares outperformed developed markets. Stock markets were supported by progress on tariffs, some well-received corporate earnings, and the ongoing enthusiasm for AI investments.

Information technology stocks continued their rebound with optimism over the potential of artificial intelligence (AI) related stocks higher. Several technology stocks also posted some well-received quarterly earnings. Meanwhile, there was an agreement by the US that semiconductor companies could resume shipments of some key advanced processors to the Chinese market.

The US economy grew at an annualised rate of 3% in Q2, rebounding from the -0.5% contraction in Q1. The Q1 figure had been affected by a sharp rise in imports amid worries over potential trade tariffs. US annual inflation had climbed to 2.7%, up from 2.5% in May, as increased tariffs began to be reflected in prices. The Federal Reserve once again left interest rates unchanged at 4.50% at its July meeting though a jobs report had strongly negatively revised numbers going back several months, adding to the expectation that the FED will finally cut its rate in September.

The dollar regained some ground against the Euro to 1,1416 or 3,15%. The Dow Jones index gained a tiny 0,08%, the S&P500 2,17% and the Nasdaq Composite 3,70%.

European stock markets made smaller gains with the Eurostoxx adding 0,31%, the German DAX 0,65% and French CAC index 1,38%. Slovenia's SBI index once again outperformed other European indices, adding a staggering 7,43%, closing at 2449,20.

The European Central Bank held rates steady at 2%. ECB President Christine Lagarde said in June that the central bank was near the end of its rate-cutting cycle. The European Union struck a deal with the US that will see tariffs of 15% imposed on EU goods being imported into the US. Shares rose in the wake of the news amid relief that a threat by President Trump to impose 30% tariffs had been avoided.

The eurozone economy grew by 0.1% in Q2 2025, a slowdown from 0.6% in Q1 but better than feared given trade uncertainty during the period.

The Japanese equity market gained with the Nikkei 225 up 1.44%. During the month, Japan reached a favourable trade deal with the US, triggering a rally led by exporters. In China, ongoing progress on US-China trade talks was beneficial for market sentiment. This included the US allowing some AI-chip exports to China to resume. The Hong Kong Hang Seng index gained 2,91%.

Rudy Marchant
Fund manager Primorski skladi

Monthly reports