A wonderful week
It was a strong and steady week – and analysts were unanimous in their positive assessments. The market rose throughout, sometimes gradually, sometimes more energetically. In any case, the indexes moved confidently higher, with the S&P 500 and NASDAQ Composite setting one record after another – they have now reached all-time highs 14 and 15 times respectively since the start of the year. Only the old-timer Dow Jones (DJIA-30) failed to join the party, closing on Wednesday just 0.01% below its record level.
The main catalyst for growth was news from the ongoing trade war, where unexpectedly optimistic agreements were reached on the introduction of new tariffs. Corporate earnings also played an important role, with results from major companies such as GOOGL, IBM, UNP and NEM supporting positive sentiment. The reporting season is now in full swing.
At the sector level, the picture was just as encouraging: all 11 economic sectors ended the week in positive territory. Interestingly, the technology sector – often the growth leader – was at the bottom of the list this time, adding just 0.48%. The best-performing sector was healthcare, with pharmaceutical and medical stocks rising 3.66%. Among the standout names were insurance giants Centene Corp (CNC) and Humana Inc (HUM), alongside pharmaceutical majors Eli Lilly & Co (LLY) and Johnson & Johnson (JNJ).
The ITS index family also delivered a strong performance. Both the ITS World Index (ITSW), which tracks global companies, and the ITS Shariah Index (ITSS), featuring Islamic-compliant stocks, set new all-time highs several times during the week. ITSW performed particularly well, gaining 1.41% – almost in line with the S&P 500, which rose 1.46%.
It is worth noting that ITSW’s gains were driven not only by the rise in U.S. equities but also by steady demand for Asian stocks. Japanese companies stood out, with shares surging after the signing of a new trade agreement between the U.S. and Japan. On the back of this, Japan’s Nikkei 225 index surpassed the psychologically significant 40,000-point mark for the first time since 2024. Toyota Motor (TM) shares jumped more than 10% over the week.
Overall, market conditions have clearly improved: much of the uncertainty surrounding trade tensions has eased, and investors are now more confident that the economic outlook will follow the most favourable scenario in the near term.
Market outlook for 28 July 2025
The new week has begun on a positive note following weekend reports that the U.S. and Europe have reached a tariff agreement.
The deal appears to be a mirror image of the agreement signed last week between the U.S. and Japan, signalling a clear trend towards unilateral investment commitments in exchange for tariff reductions. This could set a precedent for upcoming negotiations with other major economies such as China, South Korea and Taiwan.
The new U.S. tariffs on EU goods will target pharmaceuticals and automobiles – the latter being a key European export to the U.S. last year. Aircraft and related components, the second-largest export category, will remain exempt. However, the existing 50% tariffs on steel and aluminium will stay in place.
Investors welcomed the agreement, which helps to defuse trade tensions and offers companies greater clarity in their planning.
On the back of this news, futures on the major U.S. indexes moved confidently higher, gaining around 0.5% by midday Monday compared with Friday’s close. This raises the likelihood of a continued rally and potentially new record highs in the main indexes today.
Overall, the coming week looks set to be a challenging one, packed with key events – and the headlines are expected from several directions. The main focus will undoubtedly be Wednesday’s meeting of the U.S. Federal Reserve’s FOMC, at which a decision on interest rates will be announced. No surprises are expected: the probability of rates remaining unchanged currently stands at 97%.
Beyond the FOMC meeting, investor attention will turn to labour market data. Wednesday will bring the ADP employment report, while on Friday, the U.S. Department of Labor will release official figures on unemployment and payrolls.
Corporate earnings will also be in the spotlight. The standout names this week are three heavyweights from the “Magnificent Seven.” Meta Platforms (META) and Microsoft (MSFT) will report after the market closes on Wednesday, while Amazon (AMZN) is set to release its Q2 results after Thursday’s closing bell.
In addition to these tech giants, a wide range of other companies will also report, giving investors and analysts plenty to digest.
Despite the week’s intensity, market sentiment remains broadly optimistic and a continuation of the rally seems plausible. That said, from a technical analysis perspective, the current rally appears to be approaching exhaustion – so expectations for a sharp surge should perhaps be tempered.