Global stocks rallied to a new all-time closing high, gaining 4.49% in June bringing Q2 returns to 11.53% and 2025 YTD gains to 10.05% — completing a remarkable comeback from the spring’s tariff-induced turmoil. During the crescendo of the tariff turbulence on April 8th, the MSCI All Country World Index’s (ACWI) sold off 19.14% from its all-time high reached on February 18th, before rallying and setting 11 new all-time highs this month. It is the seventh-best first-half start to a year since the MSCI All Country World Index’s (ACWI) inception in 1998, although it trails 2024’s first half return of 11.30%. It is also the best ACWI quarter return since 2020.

The second quarter began on an historically tumultuous note, with President Donald Trump’s April 2nd “Liberation Day” announcement of sweeping tariffs that sent most global stock markets into “bear market” status – that is, a ~20% drop from a recent high. The CBOE S&P Volatility Index (VIX), aka the “fear index”, traded as high as 52.33 in Q2 before settling in at 16.73. Improved trade talks among US trade partners and a ceasefire agreement between Israel and Iran—tenuous as it might be – helped the VIX ease 3.57% from where it started the year. Also, in late June, the US and China resolved issues over rare earth minerals and magnet shipments, renewing hopes for further talks between the two global economic superpowers.

The MSCI ACWI Ex-US Index, which includes both international developed and emerging markets but excludes US stocks, is off to its best six-month start to a year since its inception in 1998, gaining 17.90% through the end of Q2 2025. It is outperforming the US Large Cap S&P 500 by 12.4% YTD – its widest spread to start a year since it outperformed 11.88% in 2002. The market scenario was much different in 2002, as the two global mutually exclusive benchmarks were down 1.28% and 13.40%, respectively, in the first half respectively following the dot-com bust.

Bolstering the returns of international stocks was the complimentary tailwind of appreciating foreign currencies versus the US dollar. The US dollar spot index, which is measured against a mixed basket of foreign currencies, has depreciated 2.47% MTD, 7.04% QTD, and 10.70% YTD. The US greenback is trading at 3-year lows and has experienced its worst six-month start to a year since the 1970s as investors weigh the prospect of a ballooning US government’s $3.3 trillion deficit and the potential for trade deal mishaps with major trading partners as the 90-day suspended “reciprocal tariffs” is set to expire on July 9th.

Increased expectations for interest rate cuts are pressuring the US dollar along with concerns about the Federal Reserve’s independence. In his Congressional testimony, Federal Reserve Bank Chair Jerome Powell said he does not foresee a rate cut in July and prefers to monitor early summer inflation readings for any possible signs of tariff-related price increases. However, this stance counters President Donald Trump who has blasted the Fed’s board of governors on social media in an intensifying campaign demanding interest rate cuts and calls for an ultra-low-rate environment. US Treasury 2- and 10- year yields closed the first half at 3.72% and 4.23% after starting the year at 4.24% and 4.57%, respectively. Since yields and prices move in opposite directions, the decline in rates helped the US Aggregate Bond Index to a 4.02% return YTD.

International markets are benefitting from a global movement away from US dollar-denominated assets, and emerging markets have seen strong inflows to their commodity-rich economies. Emerging markets have thus far minimized the impact from US tariffs as exporters in both Latin America and Asia have been able to redirect their goods to other countries. Latin America stocks specifically have led regional returns YTD, gaining 26.28% so far in 2025.

Technology posted the best MTD and QTD returns of all sectors, up 9.79% for June and up 22.90% in Q1. YTD, its 9.37% is 4th best, with Communications leading the way at 12.83% through Q2. On the other side of the sector return coin, Consumer Discretionary is the worst on the year, off 2.58%, and Energy stocks were the worst performing in Q2, down 8.47%, although they were able to rally 4.75% in June. A 12-day war that started with Israel targeting Iran’s nuclear facilities on June 13th caused crude prices to surge above $75 a barrel after the US bombed Iran’s nuclear facilities and then slumped to $65 after President Donald Trump announced an Iran-Israel ceasefire. Crude oil gained 7.11% in a volatile June but was still off 8.91% in Q2 and is down 9.22% YTD.

The diversified Bloomberg commodity index continues to trade choppy, up 2.41% MTD, down 3.08% QTD, and up 5.53% YTD. Gold, traditionally considered a hedge during times of uncertainty, also thrives in a low-interest rate environment, added 5.75% in Q2 to bring its YTD return to 25.86%. Gold miners, often thought of a leveraged play on the shiny metal, gained 13.25% QTD to bring YTD returns to a whopping 53.52%.

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Perigon Wealth Management, LLC (‘Perigon’) is an independent investment adviser registered under the Investment Advisers Act of 1940. More information about the firm can be found in its Form ADV Part 2, which is available upon request by calling 415-430-4140 or by emailing compliance@perigonwealth.com

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Data Source: Bloomberg Pricing Data, as of June 30, 2025.

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