Your Monthly Market Newsletter, AUGUST 2025

Moving into the month of August, the economic outlook is presenting a mixed picture. The U.S. economy saw a rebound in GDP growth in the second quarter of 2025. However, inflation has persisted above the Federal Reserve’s 2.0% goal. There have also been initial indications of price pressure from tariffs in certain industries. Trade policy introduced some volatility in financial markets. While trade agreements were announced recently in late July, tariffs imposed in August raised concerns about their potential effects on economic growth and inflation.

Financial markets were volatile but trended upwards during the first half of 2025. Moving into August, the stock market has declined after the announcement of tariffs and a weak job report, reversing earlier gains. Additionally, the labor market has shown signs of softening. The unemployment rate increased slightly last month, and job growth was less than anticipated, likely due to a slowdown in hiring. Consumer confidence remains weaker than originally expected moving into the later part of 2025, influenced by concerns about job prospects, business conditions, and the potential of tariffs from late July.

If you have any questions or would like to schedule a time to meet, please reach out. We hope you are enjoying the remaining days of summer!

Stocks

Stocks extended their rally in July, kicking off the third quarter with strong momentum. Optimism surrounding trade policy supported markets as new trade agreements were announced with a range of countries ahead of the August 1st extended tariff deadline. The NASDAQ led major indexes, outperforming the more balanced S&P 500 and the value-oriented Dow Jones Industrial as investors favored high-growth tech-heavy names. Corporate earnings have been broadly solid, with results from both large AI-driven firms and smaller companies contributing to the strength. The recent passage of the “One Big Beautiful Bill Act” also provided greater clarity around tax policy, further reducing uncertainty and supporting investor confidence.

Sector Performance

Nine of the 11 S&P 500 sectors posted positive returns in July, contributing to the broader market rally. Technology and consumer discretionary stocks led the advance, fueled by strong AI-related earnings that continued to drive investor enthusiasm. Utilities and energy also participated in the rally, benefiting from rising energy prices and renewed interest in infrastructure and income-generating assets. In contrast, consumer staples lagged as investors rotated out of defensive areas, giving back gains from earlier in the year. Healthcare remained the weakest sector, pressured by concerns over reduced government funding and ongoing uncertainty surrounding UnitedHealth.

Bonds

Fixed income markets broadly declined in July as Treasury yields rose across the curve. Since bond prices move inversely to yields, this rise led to losses for bondholders. Yields climbed in response to strong economic data, which reduced the likelihood of near-term rate cuts by the Federal Reserve (Fed). The Fed held rates steady, contributing to a 24-basis point increase in the two-year yield and a 17-point increase in the 10-year. While inflation remains relatively contained, markets continue to focus on the speed and timing of any forthcoming rate cuts, which will be critical in shaping the path forward for fixed income performance.

Economic Update

The economic effects of tariffs remain difficult to pinpoint as ongoing negotiations have likely muted their near-term impact. Despite this, the economy continued to show resilience in June, with the US adding 147,000 jobs, exceeding expectations and in line with historical trends. Inflation ticked slightly higher, with the Personal Consumption Expenditures price index (PCE) rising 2.6%, modestly above the Fed’s 2% target. The first estimate for the second quarter Gross Domestic Product (GDP) showed a 3.0% annual gain, rebounding from the prior quarter's contraction, helped by a decline in imports, which are subtracted in the GDP calculation. The ISM Manufacturing Index continued to signal contraction, though it improved more than expected, while the ISM Services Index remained in expansion territory, reflecting ongoing strength in the service sector. Together, these data points suggest the economy remains on firm footing despite ongoing trade policy uncertainty.

Plastic with a Past: Traceable Pots Made from Reclaimed Fishing nets

Today, plastic pollution is causing widespread persistence in our environment around the globe. The increase in plastic waste is a significant driver of biodiversity loss and climate change, negatively affecting nearly all ecosystems. Specifically, one area of concern is fishing pollution, primarily from abandoned or discarded fishing gear posing a significant threat to marine life. Scottish startup POTR, is looking to turn the tide by transforming ocean waste into striking geometric plant pots from plastic recovered from discarded fishing nets. The founders claim that their “ocean pots” are the world’s first planters made from traceable marine plastic. Each pot carries a scannable QR code linking to data revealing where and when the ghost net was recovered, making the products even more educational and interactive for customers. A ghost net is a fishing net that has been lost, discarded, or abandoned in the ocean. Ghost gear is widely believed to be one of the most damaging forms of plastic in our seas.

Founder of POTR, Andrew Flynn, states, “Traceability makes it real for people. The more transparent the journey, the more it sparks conversations and makes people realize they can be a part of the solution.”  A recent study found that the fishing and aquaculture industry in Scotland and England generates over 6,000 tons of plastic waste a year, with much of it ending up in the sea or washed up on shorelines. From a worldwide perspective, a recent study reveals that there is an estimated total of 75 to 199 million tons of plastic waste already in the Earth’s oceans by 2025. Every ton of recovered plastic yields over 5,000 ocean pots, and the POTR team donates 4 cents of profit per pot for ocean cleanup efforts. Each pot has a unique origami design, meaning they can be flat-packed for shipping, cutting down on shipping costs and reducing the company’s carbon footprint. From personal experience, Flynn says he was called to action to start POTR after witnessing first-hand the waste engulfing Scotland’s west coast.

POTR aims to turn these harmful materials into beautiful and inspiring pieces for homes. To learn more about this exciting initiative to protect our oceans, read the full article here. 

THOUGHT FOR THE MONTH

Index Definitions

Dow Jones Industrial Average:The Dow Jones Industrial Average® (The Dow®), is a price-weighted measure of 30 U.S. blue-chip companies. The index covers all industries except transportation and utilities.

Dow Jones U.S. Real Estate Total Return Index:The index is designed to track the performance of real estate investment trusts (REIT) and other companies that invest directly or indirectly in real estate through development, management, or ownership, including property agencies.

NASDAQ Composite:The NASDAQ Composite is a market-cap weighted index of all issues listed on the Nasdaq stock exchange. It is heavily weighted towards the technology sector. 

S&P 500 Bond Index:The S&P 500® Bond Index is designed to be a corporate-bond counterpart to the S&P 500, which is widely regarded as the best single gauge of large-cap U.S. equities. Market value-weighted, the index seeks to measure the performance of U.S. corporate debt issued by constituents in the iconic S&P 500.

S&P 500 Consumer Discretionary:The S&P 500® Consumer Discretionary comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer discretionary sector.

S&P 500 Consumer Staples:The S&P 500® Consumer Staples comprises those companies included in the S&P 500 that are classified as members of the GICS® consumer staples sector.

S&P 500 Energy:The S&P 500® Energy comprises those companies included in the S&P 500 that are classified as members of the GICS® energy sector.

S&P 500 Financials:The S&P 500® Financials comprises those companies included in the S&P 500 that are classified as members of the GICS® financials sector.

S&P 500 Index:The S&P 500® index is a market-cap weighted index of the largest 500 companies headquartered in the United States. The index covers approximately 80% of available market capitalization.

S&P 500 Utilities:The S&P 500® Utilities comprises those companies included in the S&P 500 that are classified as members of the GICS® utilities sector.

S&P U.S. Aggregate Bond Index:The S&P U.S. Aggregate Bond Index is designed to measure the performance of publicly issued U.S. dollar denominated investment-grade debt. The index is part of the S&P AggregateTM Bond Index family and includes U.S. treasuries, quasi-governments, corporates, taxable municipal bonds, foreign agency, supranational, federal agency, and non-U.S. debentures, covered bonds, and residential mortgage pass-throughs.

S&P U.S. Treasury Bond Index:The S&P U.S. Treasury Bond Index is a broad, comprehensive, market-value weighted index that seeks to measure the performance of the U.S. Treasury Bond market.

Disclosures

PLEASE NOTE: When you link to any of the websites displayed within this email, you are leaving this email and assume total responsibility and risk for your use of the website you are linking to. We make no representation as to the completeness or accuracy of any information provided at these websites.

A portion of this material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite, LLC, is not affiliated with the named representative, broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.

Index performance does not reflect the deduction of any fees and expenses, and if deducted, performance would be reduced. Indexes are unmanaged and investors are not able to invest directly into any index. Past performance cannot guarantee future results. 

Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect again loss. In general, the bond market is volatile; bond prices rise when interest rates fall and vice versa. This effect is usually pronounced for longer-term securities. Any fixed-income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Vehicles that invest in lower-rated debt securities (commonly referred to as junk bonds or high-yield bonds) involve additional risks because of the lower credit quality of the securities in the portfolio. International investing involves special risks not present with U.S. investments due to factors such as increased volatility, currency fluctuation, and differences in auditing and other financial standards. These risks can be accentuated in emerging markets.

The statements provided herein are based solely on the opinions of the Osaic Research Team and are being provided for general information purposes only. Neither the information nor any opinion expressed constitutes an offer or a solicitation to buy or sell any securities or other financial instruments. Any opinions provided herein should not be relied upon for investment decisions and may differ from those of other departments or divisions of Osaic or its affiliates.

Certain information may be based on information received from sources the Osaic Research Team considers reliable; however, the accuracy and completeness of such information cannot be guaranteed. Certain statements contained herein may constitute “projections,” “forecasts” and other “forward-looking statements” which do not reflect actual results and are based primarily upon applying retroactively a hypothetical set of assumptions to certain historical financial information. Any opinions, projections, forecasts and forward-looking statements presented herein reflect the judgment of the Osaic Research Team only as of the date of this document and are subject to change without notice. Osaic has no obligation to provide updates or changes to these opinions, projections, forecasts and forward-looking statements. Osaic is not soliciting or recommending any action based on any information in this document.