This Weekly Financial Markets Update reviews the top market headlines: U.S. and Japan Strike Landmark Trade Deal, Existing Home Sales Drop to Nine-Month Low, Power Costs Rise on AI Boom
  • The Nikkei 225 surged 4.1% last week
  • Existing home sales fall 2.7% in June
  • The price for electricity on the largest U.S. power grid was set at a record $329.17 per megawatt

Top Three Market Headlines

U.S. and Japan Strike Landmark Trade Deal: The U.S. and Japan finalized a comprehensive trade agreement last week that eased economic tensions between the nations. The deal reduced the tariff rate on imports from Japan to 15% from the 25% level previously threatened by the Trump administration, while opening up Japanese markets to American autos and agricultural products, including rice. Japan also committed to a $550 billion investment in American projects. The Nikkei 225 index rose more than 4% on the week in local currency terms, with investors relieved that the tariffs will be less damaging than feared to Japan's export-dependent economy particularly its automotive industry.

Existing Home Sales Drop To Nine-Month Low: The National Association of Realtors reported last week that existing home sales in the U.S. fell in June to a seasonally adjusted annual rate of 3.9 million units. This was down 2.7% from the prior month and was the lowest level since September 2024. Sales have been stuck in a range from 3.8 million to 4.3 million for more than two years, down significantly from more than 6.0 million in early 2022. The sustained sluggish activity has been driven by higher mortgage rates, while an undersupply of homes for sale has driven up prices and challenged home affordability.

Power Costs Rise on AI Boom: The price for electricity on the largest U.S. power grid hit a record level last week. PJM Interconnect, which secures electricity on a wholesale basis for customers across 13 states in the Midwest and mid-Atlantic, announced that the daily capacity price paid to power generators and other suppliers for the upcoming year was set at $329.17 per megawatt at its annual auction held last Tuesday. This was up from $269.92 last year and may result in some customers in the region seeing their electricity bills rise 1.5% to 5% versus last year. The rush in electricity demand is largely attributed to the swift expansion of artificial intelligence (AI) data centers in the region, which require substantial amounts of energy.

As of July 25, 2025 Week Quarter-To-Date Year-To-Date One-Year
MSCI All Country World 1.44% 2.61% 12.93% 19.88%
S&P 500 1.47% 3.03% 9.42% 19.92%
Russell 2000 0.95% 4.00% 2.14% 3.11%
MSCI EAFE 1.92% 1.40% 21.12% 18.77%
MSCI Emerging Markets 0.70% 3.11% 18.85% 19.74%
FTSE NAREIT Equity 1.27% 1.96% 1.70% 6.66%
Bloomberg Commodity -1.48% 1.72% 7.35% 11.83%
Bloomberg U.S. Aggregate 0.37% -0.40% 3.60% 4.49%

Bloomberg 7/22/2025, PJM 77/22/2025, WSJ 7/23/2025, Thomson Reuters 7/23/2025, NAR 7/23/2025. FactSet. 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.