This Weekly Financial Markets Update reviews the top market headlines: U.S. GDP Rebounds in Q2, No Action from the Federal Reserve, July Jobs Report Disappoints
  • U.S. GDP rose at a 3.0% annual rate in Q2
  • The Federal Reserve left the federal funds rate target range unchanged at 4.25%-4.50%
  • The U.S. economy added 73,000 jobs in July

Top Three Market Headlines

U.S. GDP Rebounds in Q2: The U.S. Bureau of Economic Analysis reported last week that U.S. real (i.e., inflation-adjusted) gross domestic product (GDP) grew at a seasonally-adjusted annual rate of 3.0% in the second quarter of 2025. This marked a strong rebound from the 0.5% decline recorded in Q1. The primary driver of the Q2 turnaround was a notable reduction in imports, which are a subtraction in the GDP growth calculation, creating a positive effect on reported growth. Personal consumption also accelerated during the quarter, supporting overall growth.

No Action from the Federal Reserve: For the fifth straight meeting, the U.S. Federal Reserve's rate-setting committee voted to maintain the federal funds rate target range at 4.25% to 4.50%. Chairman Jerome Powell cited continued uncertainty around tariffs and inflation as primary drivers for the committee's decision. Mr. Powell noted that while the inflationary effects of tariffs could be short-lived, they could also be more persistent, a risk the committee seeks to prevent. Notably, the decision to maintain the current target range was made in a 9-2 vote, marking the first time since 1993 that two members voted against the committee's decision.

July Jobs Report Disappoints: The U.S. Department of Labor reported last Friday that the U.S. economy added just 73,000 jobs in July, below expectations for 100,000 gains. Further, the number of additions for May and June was revised significantly downward by 258,000, erasing nearly all previously reported gains for the two months. In response to the report, the 2-year Treasury bond yield fell nearly a quarter percentage point on the day, and markets quickly repriced Federal Reserve rate reduction expectations, with the odds of a September cut jumping from 40% to 88% on the federal funds futures market.

As of August 01, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World -2.52% 0.03% 10.08% 15.88%
S&P 500 -2.34% 0.61% 6.85% 16.06%
Russell 2000 -4.16% -0.33% -2.11% 0.47%
MSCI EAFE -3.13% -1.77% 17.33% 14.21%
MSCI Emerging Markets -2.47% 0.55% 15.91% 15.25%
FTSE NAREIT Equity -3.12% -1.23% -1.48% -0.13%
Bloomberg Commodity -2.67% -1.00% 4.48% 10.13%
Bloomberg U.S. Aggregate 0.95% 0.55% 4.59% 3.79%

Federal Reserve Board 7/30/2025, Bloomberg 7/30/2025, U.S. Bureau of Economic Analysis 7/30/2025, WSJ 8/1/2025. Data from Morningstar Direct. Returns for periods greater than one year are annualized. Investment advisory services are offered by Gallagher Fiduciary Advisors, LLC ("GFA"), an SEC registered investment advisor that provides retirement, investment advisory, discretionary and independent fiduciary services. Registration as an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the SEC. GFA is a limited liability company with Gallagher Benefit Services, Inc. as its single member. GFA may pay referral fees or other remuneration to employees of Arthur J. Gallagher & Co. or its affiliates or to independent contractors; such payments do not change our fee. Neither Arthur J. Gallagher & Co., GFA, their affiliates nor representatives provide accounting, legal or tax advice. GFA does not express an investment opinion regarding any specific commodity, sector or individual security. Unless otherwise expressly noted, the contents of this communication do not constitute securities or investment advice, nor should this communication be construed as an opinion regarding the appropriateness of any investment. The information provided cannot take into account all the various factors that may affect your particular situation, therefore you should consult your GFA consultant before acting upon any information or recommendation contained herein to discuss the suitability of the information/recommendation for your specific situation.