The Pulse on the Economy and Capital Markets: July 2025

To Summarize: Despite cooling momentum, stock markets remain resilient, reflecting a surprising upside in economic data. Consumer and business sentiment are holding up better than expected. Although hiring has slowed, real-time data signals that businesses are interested in hiring more employees again. Meanwhile, inflation is becoming sticky, particularly in goods, as tariff-driven price pressures start to reach consumers.

The big takeaway – Stock markets are strong, businesses are resuming hiring, and inflation is sticky due to tariff-driven pressures.

In the Markets: Stock markets continue to rally globally, with developed and international markets up nearly 20%, and the Nasdaq and S&P 500 each up about 8% year to date. Bond markets have been mixed in July but have gained 3-5% in 2025. Oil is higher in July but down for the year, while copper is up 40% and Bitcoin 25%. Historically, a strong first half is followed by a slower third quarter, but markets often rally into the New Year.

Economic Turnaround & Cautious Optimism: The economy has taken a sharp turn for the better, with data exceeding expectations and fueling markets. However, even with improving data and decent demand, many CEOs are signaling that growth remains positive but at a slower rate. Small business confidence, while holding relatively strong, is stabilizing at pre-pandemic levels, suggesting cautious optimism among business owners.

Strong Spending Amid Slow Job Growth: Despite a slow growth job market, consumer spending remains healthy, indicating optimism among households and businesses. Real-time data from Indeed.com shows a slight uptick in new job postings, suggesting companies may be preparing to hire again. While the economy is resilient, inflation is declining slower than expected, particularly in manufactured goods. Tariff impacts are starting to reach consumers and could pose a headwind in the months ahead.

Top Headlines: We’re reading about the multifamily housing starts 31% jump in June; FICO, the famed credit score company, taking a massive stock market hit after the White House’s announcement; consumers may face electricity rate increases due to booming AI data center demand; casual and upscale dining chains experience positive year-over-year growth since May.

Related resources:

• Commercial Real Estate: Multifamily Starts Jump in June
• Mortgages: The company behind your credit score is plunging after a White House announcement
• AI: U.S. utilities plot big rise in electricity rates as data center demands boom
• Restaurants: Despite concerns for the economy, casual and upscale dining foot traffic is thriving

Disclosures 

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