CIBC Private Wealth
July 11, 2025
Money Wellness Education Financial literacy Economy Commentary News Weekly updateMorning Market Brief
With the first half of 2025 now behind us, this represents a good time to look back at the economy and world events that have impacted global financial markets. Trade policy came under the microscope, with new US President Donald Trump threatening significant tariffs on the rest of the world, including Canada. This created a lot of economic uncertainty, which weighed on consumer and business confidence. It also caused some volatility in financial markets over the first half of the year.
- Changes in trade policy and geopolitical tensions weighed on global economic activity. Trade tensions, in particular, left many questioning the outlook for the global economy, which concerned households and businesses.
- In Canada, the economy expanded more than expected in the first quarter of 2025, benefiting from surging exports ahead of tariffs. However, economic activity began slowing in the second quarter largely due to trade disruptions, which dragged down economic conditions.
- Despite economic uncertainty and periods of volatility, Canada’s main stock market, the S&P/TSX Composite Index, advanced over the first half of the year, reaching a new record high. Materials was the best-performing sector, benefiting from higher gold prices.
- US stocks, as measured by the S&P 500 Index, also increased over the first half but underperformed Canadian equities. The S&P 500 Index also reached a new record closing price.
- Canadian bond prices increased slightly. The average yield on Canadian bonds also edged higher. The Bank of Canada lowered interest rates early in the year before holding steady over the second quarter.
The first couple of weeks of the second half of the year have brought us new tariff announcements, which are again heightening concern about the global economy. Trade negotiations remain ongoing, offering some hope of lower tariffs. While financial markets have seen periods of volatility in the first half of the year, markets have historically risen over the longer term.
If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.