Issue link: https://info.seic.com/i/1538192
Executive Summary • The global tariff landscape shifted notably in July, as the Trump Administration announced trade deals with the European Union, Japan, Indonesia, and the Philippines. These agreements helped delay steep tariff hikes originally set for 1 st August, now postponed to 7 th August. While the U.K. maintained its 10% baseline rate, other nations face uncertainty as negotiations continue. • Despite ongoing tariff uncertainty and geopolitical tensions, markets remained resilient in July. The S&P 500 and Nasdaq hit record highs, driven in part by the 'Magnificent Seven' U.S. technology stocks. However, gains were widespread, also seen across small cap and value stocks. • U.K. inflation rose unexpectedly in June to 3.6%, driven mainly by higher fuel costs. The economy contracted by 0.1% in May, in contrast to robust Q1 performance, which had been boosted by increased activity ahead of U.S. tariff announcements. Economic Factors Interest Rates • The Federal Reserve held interest rates steady in July, though markets increasingly anticipate a potential cut in September. The ECB also held rates amid stable inflation and persistent tariff- related uncertainty. Inflation • Inflation rose in both the U.K. and U.S. during July, driven by tariff-related price pressures, while the Eurozone remained stable at the ECB's 2.0% target. Economic Growth • The Eurozone recorded modest Q2 2025 growth of 0.1%, down from 0.6% in Q1, while the U.S. economy rebounded with a strong 3.0% GDP increase, reversing its first-quarter contraction. Tactical Views Commodities • Commodity prices were mixed in July driven by tariff-related pressures. Oil prices were volatile, as talk of OPEC+ increasing output added uncertainty to the market. U.S. Large Cap Equities • U.S. large-cap equities remained resilient in July, buoyed by mostly positive earnings reports. However, several companies flagged ongoing uncertainty related to tariffs, which could weigh on future performance. Pessimistic Optimistic Pessimistic Optimistic SEI Monthly Update July 2025 This is a marketing communication Pessimistic Optimistic Pessimistic Optimistic Pessimistic Optimistic Legend SEI's Current View: Direction of movement from previous: For use by advisers of regulated intermediaries in the UK in acceptance with all applicable laws and regulations