WEEKLY MARKET RECAP – JULY 25, 2025

The S&P 500 and NASDAQ continued their upward momentum, each closing the week more than 1% higher, marking gains in four of the past five weeks. Since June 20, the S&P 500 has climbed over 7%, while the NASDAQ is up nearly 9%.

As earnings season heats up, seven mega-cap tech companies, often referred to as the “Magnificent 7,” are once again expected to drive the bulk of second-quarter earnings growth. According to FactSet, these companies are projected to post average earnings growth of 14.1%, compared to just 3.4% for the remaining 493 companies in the S&P 500.

Investors also continued to monitor trade talks ahead of the August 1 deadline set by the Trump administration. While progress was reported with nations like Japan and Indonesia, discussions with other major partners, including the European Union, India, and Canada, remain ongoing.

Midweek, the Dow briefly surpassed its all-time high but closed just 4 points below its record close of 45,014 from December 4, 2024. In contrast, the S&P 500 and NASDAQ continued to break new records. As of Friday, the Dow remains just 0.2% below its peak.

In the housing sector, both existing and new home sales missed expectations. Existing home sales dropped 2.7% in June to an annual rate of 3.93 million, while new home sales inched up 0.6% to 627,000, falling short of forecasts. Persistently high mortgage rates and elevated prices continue to challenge buyers.

Meanwhile, market volatility continued to subside. The Cboe Volatility Index (VIX), a key measure of short-term U.S. stock market expectations, fell 9% for the week to 14.9—its lowest level in five months and down from 21.6 on June 17.

Looking ahead, investors are bracing for a packed week of economic updates. Wednesday will bring the first estimate of second-quarter GDP, which is expected to show whether the economy rebounded after a 0.5% annualized contraction in Q1, largely attributed to a surge in imports ahead of anticipated tariffs. That marked the first GDP decline since early 2022.

In addition to the GDP report, markets await a key U.S. Federal Reserve policy decision on Wednesday and the July jobs report on Friday. The Fed is widely expected to hold interest rates steady, while the jobs report will reveal whether July’s employment growth maintained momentum following June’s unexpectedly strong 147,000 job gain.