Now that we’re officially through the first half of 2025, it’s a great time to take stock of where the markets and economy stand—and what we might expect as the year continues.
So far, the markets have held up better than many expected. After a quick but sharp dip in April, the S&P 500 has bounced back and finished the first half of the year up 6.2%. That puts us slightly ahead of the historical average and is a reminder of how resilient markets can be, even during periods of uncertainty.
The broader economic picture has been a bit more mixed. Growth has slowed, which isn’t surprising given the backdrop of shifting trade policies, tax changes, and a generally uncertain policy environment. That said, the core of the economy—consumer spending and business investment—remains fairly strong. Consumers are still spending, thanks in part to wage growth continuing to outpace inflation. We’re also seeing steady investment from larger companies, particularly in the tech and AI space.
Inflation has continued to trend lower this year, with cooling energy and housing costs helping ease pressure on prices. The Fed hasn’t made any rate changes in 2025 so far but is signaling the potential for two cuts later this year, assuming inflation continues to ease and growth slows further.
As we look ahead, it’s clear that policy decisions and global developments will continue to play a big role in market behavior. But one consistent theme remains: the importance of staying invested, staying diversified, and not overreacting to the headlines. Timing the market based on short-term news is rarely effective, and the first half of this year has been a textbook example of why long-term focus pays off.
AssetMark’s 2025 Mid-Year Outlook
All information from sources believed reliable but may not be guaranteed. Past performance does not guarantee future results.