- Insight Weekly
- Posts
- What 2025’s First Half Really Tells Us About Markets
What 2025’s First Half Really Tells Us About Markets
Chip stocks outperform
INSIGHT WEEKLY: July 6, 2025
📩 Images not loading? Click “Download external images” or read the full magazine online via the link above.
⏳ 5 minutes reading time.
And to refer to during the week.
Stay ahead without the overload.
500+ professionals have subscribed to this magazine.
🌐 Markets Overview
📈 Markets recover at the end of the first half of the year
Week ending July 4:
2025 first half look back:
U.S. equities remain broadly positive but growing more slowly compared to previous years.
S&P 500 is up 6.8%, following massive 2024 gains. Investor caution stems from stickier-than-expected inflation and delayed Federal Reserve rate cuts.
Nasdaq Composite mirrors this pattern (↑ 6.7%), as AI-related enthusiasm moderates and valuation discipline intensifies.
Dow's performance (↑ 5.4%) reflects its cyclical exposure amid slowing GDP growth projections for H2 2025.
Russell 2000, the small-cap index was almost flat (↑ 0.8%), constrained by tighter credit conditions and weak earnings from domestically focused firms.
The standout performer year-to-date is Germany’s DAX, up 19.5%, driven by easing ECB monetary policy, accelerating industrial production, and tech-led rallies. The stronger euro has been a modest drag on exports, but it did not derail broader equity optimism.
The broader Eurozone's STOXX 50 recorded a solid 8.0% rise, underpinned by falling inflation, ECB rate reductions, and stronger-than-expected earnings across consumer and industrial sectors.
The FTSE 100 also had an 8.0% increase, benefiting from improved investor sentiment as UK inflation stabilizes and the Bank of England pivots towards a dovish stance.
France’s CAC 40 gained 5.1%, tempered by political uncertainty following legislative shifts and economic underperformance relative to its European peers.
Japan’s Nikkei 225's 13.7% YTD climb follows a volatile 2024, reflecting structural reforms, resilient corporate earnings, and optimism around the Bank of Japan’s carefully calibrated tightening path.
India's Nifty 50 continues its multi-year outperformance, up 7.4% YTD, buoyed by resilient GDP growth (estimated at 6.9% YTD), robust FDI inflows, and strong IT and consumer sector fundamentals.
Gold surged 27.2% YTD to a record high, driven by heightened central bank purchases, especially from China and emerging markets, and investor demand amid geopolitical tensions and currency diversification strategies.
WTI crude oil declined 7.3%, reflecting a persistent global supply glut and weaker demand signals from China’s slowing industrial output.
Currency markets have seen broad dollar weakness year-to-date, with the euro and pound strengthening sharply as European growth outperformed expectations and the Fed maintained a cautious policy path.
Bond yields declined notably, with the U.S. 5-year Treasury yield falling 44 basis points and the 10-year down 22 bps YTD, reflecting market anticipation of Fed easing as inflation cools and growth projections are revised downward.
Bitcoin continues its momentum, rising 15.4% YTD following explosive 2023 returns. Increased institutional adoption, ETF inflows, and rising geopolitical risks have bolstered demand as a digital store of value.
Tech stocks year to date
Meta’s robust YTD gain of 22.8% continues its momentum from a stellar 2024. The company has benefited from strong advertising revenue recovery, driven by generative AI-powered ad-targeting innovations and cost discipline. Improved monetization on Reels and WhatsApp is also contributing, while regulatory clarity in the U.S. has eased some compliance headwinds, improving investor sentiment.
Nvidia remains a dominant force in the AI boom, up 18.7% YTD after surging over 170% in 2024. Fueled by insatiable demand for AI-capable GPUs, Nvidia's strategic data center partnerships and continual innovation in hardware architecture (notably the Blackwell platform) have driven its market leadership. Despite concerns over export restrictions to China and increasing competition from AMD and Intel, Nvidia has sustained pricing power and deepened its footprint in hyperscaler and enterprise training workloads.
Microsoft has vastly benefited from early positioning in AI infrastructure.
Tesla, down 21.9% YTD. Its underperformance stems from multiple converging challenges: persistent pricing pressures amid escalating EV competition from Chinese manufacturers like BYD, slowing global EV adoption in key markets (especially Europe), and investor concerns around stagnating margins. Moreover, delays in ramping full autonomy and the muted impact of the Cybertruck have weighed on sentiment.
Apple's 14.7% YTD decline partially reflects softening global iPhone demand, particularly in China, amid intensified competition. Plummeting hardware sales and skepticism around the near-term monetization of its Vision Pro mixed-reality initiative are dampening outlooks, despite strong services revenue growth.
Alphabet’s modest decline (-5.2%) stems from slower-than-expected cloud growth and rising expenditures to catch up in generative AI, an area where rival Microsoft has moved decisively with OpenAI collaborations.
Macro Watch: This Week’s Economic Developments
🌍 Global Outlook
Economic momentum continues to diverge across regions: the U.S. has shown relative resilience, Europe remains stuck in stagnation, and Asia, and particularly China, is seeing softer growth. Global inflation is broadly moderating year over year, but core categories, especially services, remain sticky, keeping central bankers from declaring victory. Meanwhile, uncertainty from ongoing trade tensions and shifting strategic alignments in Asia has kept investors cautious and risk appetite in check.
🇺🇸 United States
The U.S. economy continues to stand out as a relative bright spot. GDP growth estimates for Q2 remain steady, supported by robust consumer spending and a resilient labor market.
However, fiscal concerns are rising, with the national debt surpassing $37 trillion this week, raising questions about long-term sustainability in a high-rate environment.
The Fed maintained its data-dependent stance after the latest PCE inflation reading showed modest cooling to 2.5% year over year, still above its 2% target. Futures markets now lean toward at least one interest rate cut by late Q4 if disinflation holds.
🇪🇺 Europe
The eurozone continues to struggle with stagnation risks. Headline CPI held steady at 2.4%, while core inflation edged down slightly, suggesting softer underlying demand. Germany, the region’s industrial heavyweight, reported disappointing factory orders for May, highlighting persistent challenges tied to weak global demand and high energy costs.
🌏 Asia
Asia offered a mixed picture this week.
In China, growth momentum has softened, with several investment banks cutting their Q2 forecasts on the back of muted consumer spending and slowing export demand. The PBoC kept lending rates unchanged, reflecting a measured stance even as stimulus calls grow louder.
Meanwhile, in Japan, inflation ticked down to 2.2%, opening the door for the Bank of Japan to continue gradually dialing back its ultra-loose policy. Still, Governor Ueda signaled caution given the country’s fragile economic recovery.
If you like this newsletter, please send this link to friends, family, and colleagues and post it on social media. https://insight-weekly.beehiiv.com/subscribe
🌐 Artificial Intelligence and Tech
This cover has been designed using assets from Freepik.com
Google’s rolled out Gemini 2 for enterprise clients, which adds a much more advanced memory capability. That’s a big deal for business applications, where chatbots and copilots often fail because they “forget” previous exchanges. Gemini 2 also boasts tighter enterprise security features and better tool integration.
Meta’s LLaMA 4’s multimodal update brings together text, images, audio, and even video reasoning in one system. Multimodality is widely seen as the next big leap for generative AI, allowing systems to interpret and reason across diverse inputs the way humans do.
Nvidia is teaming up with SAP to embed generative AI copilots directly into enterprise ERP systems. It could mean millions of corporate back-office processes that could soon be supported by generative assistants. Nvidia’s chips and SAP’s huge install base create a natural partnership, and it will be worth watching how quickly enterprise customers jump on board.
AI “gigafactories” in Europe? The idea is to develop continent-scale data and compute centers that could rival U.S. cloud providers. That means not only more server farms, but also entire supply chains for chips, data storage, and network capacity.
Get your free guide to AI
🌐 Crypto Corner
Top 10 cryptos:
Bitcoin (BTC) has appreciated 15.9% YTD, extending its multi-year rally following gains of 120.8% in 2024. This continued strength is underpinned by increased institutional adoption, spurred by the maturation of spot Bitcoin ETFs, robust demand from sovereign wealth funds, and heightened geopolitical concerns that have elevated BTC’s role as a hedge against fiat instability.
XRP is up about 7% year-to-date, after a massive 237% surge in 2024 driven by the resolution of its SEC case, which cleared a major regulatory overhang. That settlement sparked renewed confidence in Ripple’s cross-border payment ambitions, including partnerships with several central banks. However, momentum has cooled so far in 2025 as institutional adoption in Asia has been slower than expected, and Q2 transaction volumes have come in softer.
Stablecoins such as Tether (USDt), USD Coin (USDC), and Binance USD (BUSD) have remained flat or marginally changed, reflecting their pegged nature and the broader market's reversion to risk-neutral positioning in recent months.
Binance Coin (BNB) has declined 6.4% YTD, despite a blockbuster 124.4% rally in 2024. Ongoing regulatory scrutiny in multiple jurisdictions, particularly concerning Binance’s global compliance measures, has weighed on investor sentiment.
Solana (SOL) is down 21.7% YTD following a spectacular 920% rise in 2023. Several high-profile outages and continued liquidity fragmentation on Solana-based DeFi platforms have prompted a rotation into higher-stability Layer-1s.
Cardano (ADA), with a 31.5% YTD decline, has underperformed amid reduced DApp activity and increasing competition from faster L1 platforms like Avalanche and Sei. Despite its strong 2023, ADA’s perceived innovation lag and less agile governance have curtailed further upside.
Ethereum (ETH) has fallen 24.3% YTD despite its leading smart contract footprint. Ongoing challenges related to scaling and high Layer-2 fees have drawn criticism. Moreover, capital has rotated into newer chains offering faster throughput and lower friction, affecting ETH’s market cap dominance.
Polkadot (DOT) has experienced the steepest YTD drop at 49.1%. Market waning interest in multichain interoperability - the core of Polkadot’s value proposition - combined with limited Parachain adoption, has significantly depressed DOT’s utility and market confidence.
See the previous spotlight on Bitcoin halving
If you liked this newsletter, please send this link to friends, family, and colleagues and post on social media. https://insight-weekly.beehiiv.com/subscribe
Stay tuned for more insights and updates each week.