Monthly Market Wrap: July 2025

The Monthly Market Wrap provides an insightful analysis of treasury yields, fixed income performance, mega-cap stocks, and key economic indicators in July 2025. It also delves into housing market data and the performance of commodities.

Key Stock Market Index Performance

Equities kicked off the second half of 2025 on a mostly positive note with most indices posting gains in July. The Dow Jones Industrial Average rose 0.2%, the S&P 500 added 2.2%, and the Nasdaq Composite advanced 3.7%. Only Developed EAFE Markets had a negative July, shedding 1.4% in the month.

The most defensive and most cyclically-sensitive sectors topped the list for July: Utilities and Technology, which rose 4.9% and 3.8%, respectively. Industrials came in third place with a 3% gain. Six of the ten worst-performing S&P 500 stocks in July were Health Care names, dragging the sector down by 3.2%, making it the worst performer in July.

Economic Data

Employment

The unemployment rate remained at 4.2% in July for the fourth month out of the last five, even as the labor force participation rate fell a tenth of a percentage point to 62.2%. The most recent nonfarm payrolls report showed 73,000 jobs were added to the U.S. economy in July, as payroll figures for both May and June were revised significantly down by more than 250,000 combined.

Inflation vs. Fed Funds Rate

The US inflation rate logged a slight increase MoM, coming in at 2.67% in June. Core inflation rose to 2.93% between May and June. The US Consumer Price Index inched higher by 0.3% MoM in June, and US Personal Spending grew 0.34% between May and June.

The Federal Reserve maintained its key Fed Funds Rate target range of 4.25%-4.50% at the FOMC’s July 30th meeting, the fifth consecutive meeting in which it has voted to do so. The next meeting will take place on September 17th, at which the majority of investors currently anticipate the Fed will buck its recent trend by cutting the target rate by 25 basis points, according to the CME FedWatch tool.

Housing Prices and Mortgage Rates

US New Single-Family Home Sales rose 0.64% MoM in June on the heels of a double-digit decline last month, while Existing Home Sales contracted 2.72% in the same month. The Median Sales Price of Existing Homes set a new all-time high in June for the first time since June 2024, climbing 2.74% MoM to $435,300.

Mortgage rates were relatively unchanged throughout July; the 15-year Mortgage Rate was 5.85% as of July 31st, while the 30-year ended the month at 6.72%.

Oil and Gas Prices

Oil prices increased in July following a volatile June stemming from concerns over diminishing production in the Middle East; the price of Brent crude spiked 4% in July to $70.87 per barrel as of July 31st, while WTI rose 2.3% to $67.81.

Despite the higher oil prices, the average price of gas fell four cents to $3.24 per gallon MoM.

Fixed Income

Treasury yields rose across the board in July, with the exception of the 3-month Treasury Rate which stayed flat MoM at 4.41%. The 2-year Treasury Rate logged the highest monthly increase of 22 basis points.

Higher yields across the curve pushed prices of bond funds lower, such as the iShares 20+ Year Treasury Bond ETF (TLT), which slipped 1.1% in July. 

Bautis Financial LLC is a registered investment advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.