August 2025 Market Update
In this August market update, Chief Investment Officer Brian Andrew, CFA®, looks at how markets continue to present opportunities and challenges for investors. The S&P 500 climbed another 3% in July, bringing year-to-date gains above 16%, with much of that strength concentrated in a handful of mega-cap technology stocks, Microsoft, Amazon, Google, Nvidia, and Meta, fueled by the AI investment boom. At the same time, corporate earnings have generally exceeded expectations, even as tariffs and policy uncertainty create headwinds. With the Federal Reserve holding rates steady but signaling potential cuts later this year, opportunities may shift for both investors and borrowers. Against this backdrop, diversification, careful positioning, and close attention to economic policy remain essential.
Key Takeaways:
- Equity markets are reaching new highs, but gains are heavily concentrated in a handful of AI-driven mega-cap stocks.
- Tariff pressures are building, and while large companies are adapting, smaller businesses may struggle as costs rise.
- The Fed is divided on interest rate policy, with potential cuts ahead that could reshape opportunities in bonds, mortgages, and beyond.
We hope you find this video both informative and insightful. For any questions, please reach out to your Merit financial advisor.
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