Market commentary
SEI Forward
Markets scaled a wall of worry in the second quarter of 2025—geopolitics took center stage from tariff turbulence, while equity markets rallied sharply from the post “Liberation Day” lows.
SEI Forward: second quarter
Delays on implementing broad-based tariffs and progress with certain negotiations, including China, gave investors confidence to buy the early April equity dip and push the S&P 500 Index to an all-time high to close the quarter.
Even the lack of progress with the Russia/Ukraine war and the escalation of the conflict between Israel and Iran, including the U.S. bombing of Iranian nuclear sites, were not enough to derail the risk rally. In fact, even oil and volatility markets failed to hold gains from the price spike following news of the U.S. involvement given the subdued Iranian response, open shipping lanes in the Strait of Hormuz, and a clear desire from the U.S. administration to limit further actions.
While markets were resilient during the quarter, we begin the second half of the year with additional walls to climb (including the looming expiration of tariff delays and the likely flow through of trade policies already in place into near-term economic data).
There are bright spots, however, most notably the fiscal and monetary stimulus being implemented around the globe—which may soon include the U.S. as the Federal Reserve (Fed) is poised to cut interest rates, and the Trump 1.0 tax cuts appear likely to be extended.
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