Tariffs were once again the biggest topic of the month, with President Trump initially delaying an original 90-day deadline that was due to end on July 9 until August 1. Shortly after, he sent letters indicating even higher tariffs than had been announced on April 2 on many of the US' trading partners. The month ended with the US agreeing deals with several key trading partners, as Japan, the EU and South Korea accepted tariff rates of 15%, while some Asian countries saw slightly higher rates, including Vietnam at 20% and Indonesia and Philippines at 19%. These framework agreements left plenty of questions about the details, not least on whether plans for ambitious investment into the US outlined in the deals would actually materialize. Elsewhere, the end of July saw another 90-day extension of current tariffs for Mexico (25% for non-USMCA goods and autos), while countries that did not yet agree a deal were hit with higher but varying rates, including India (25%) and Brazil (50%). And late on July 31, President Trump announced that Canada would now face 35% tariffs (tough USMCA-compliant goods are exempt). Market attention at the start of the month had been on US fiscal policy, with the Senate passing, and President Trump signing, the One Big Beautiful Bill. Following this package of tax cuts and other measures, the US federal deficit is expected to reach an elevated 6.5-7% of GDP over the next few years. In Europe, the European fiscal stimulus outlook has continued to surprise to the upside in past months, with larger-than-expected NATO commitments coming alongside the rollout of swifter (and more sizable) German spending plans. The ECB also delivered a hawkish hold, with President Lagarde signaling that the 2% deposit rate reached in June may well mark the end of its easing cycle. In addition, the NATO members agreed beginning of July to set a defense spending target of 5% of GDP by 2035, up from current 2%. This includes 3.5% allocated to core defense and 1.5% designated to resilience investments, such as cyber-security and infrastructure improvements.
Turning to equities, most equity indices moved higher in July, with Greece's AMEX (+7,3% total return) the best performer. Other notable advancers included the Shanghai Composite (+4,5%), the UK’s FTSE 100 (+4,3%). In addition to upbeat data and declining trade risks, US stocks were supported by a return of the 'tech-exceptionalism' narrative as Microsoft (+3.95%) and Meta (+11.25%) surged on the days after their Q2 results. A solid earnings season was also helped by a lower-than-expected drag from tariffs on corporate profitability, with the S&P 500 (+2.27% total return) and NASDAQ (+3.73%) posting third consecutive monthly gains. The NASDAQ even registered a remarkable 14 all-time highs over the 22 trading days of the month, while the Mag-7 ended July at a new record high of its own. Reduced trade fears also support gains for global equities, though some of the tariff-exposed indices, including Germany's DAX (+0,65%), underperformed. And with the Fed also in no rush to cut rates, this sent the US dollar index +3.19% higher, erasing some of its -10.7% decline in H1. In Europe, sector performances reflected diverging trends. Five sectors – most of them cyclical – outperformed, Travel & leisure (+6.05%), Banks (+7,17%), Basic resources (+2,71%), Energy (+5,07%) and Industrials (+2,33%). Bringing up the rear were Media (-6.5%), Retail (-4,18% and Real estate (-4,1%). In contrast, the monthly performance of styles on European equities was relatively consistent with Value (+2.6%) significantly outperformed Growth (-1,0%).
The ATX gained 2% to reach the highest level since 2009. Banks (Erste Group) and Insurance (Uniqa) were the best performing stocks in July with 11,41% and 10,09% respectively. Also DO&CO performed strongly in July. The worst performing stocks in July have been wienerberger (-6,64%) after announcing weaker Q2 results especially in North America.
Autor:
Andreas Wosol
Member of the board of ÖVFA
Amundi Austria GmbH, Head of Value
1 August 2025
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Note
Wiener Börse AG would explicitly like to point out that the data and calculations given in this report are historic values, which do not permit any conclusions as regards future developments or value stability. Price fluctuations and loss of capital are possible in securities trading. The contribution is the personal opinion of the analyst and does not constitute a financial analysis or a recommendation for investment by the exchange operating company, Wiener Börse AG.