In the first half of 2025, global markets essentially oscillated between two extremes. The easing of inflation, the geopolitical upheavals and the technology boom are driving a new trend that is characterized by caution and optimism.
A recent study on 112 global indexes showed that 88 rose and 24 fell in the time period mentioned.
US stocks led the rally. The S&P 500, and Nasdaq, both reached new highs. This was largely due to expectations for Federal Reserve rate reductions and an increase in technology stocks.
Europe saw gains as well, thanks to easing of energy restrictions and ECB interest rate reductions. Emerging markets performed also well despite a declining dollar (the DXY fell by approximately 11% in H1).
The top performing indexes in H1 2020 (YTD% Change)
Volatility was always present, as an avalanche of announcements on tariffs in April and a flare-up between Israel and Iran sent the indexes plummeting before they recovered after policy relief.
The turbulence in the market made it important to analyze trader behaviour, with investors balancing rewards and turbulent newsflow by alternating between safer havens such as gold (which reached $3,500/oz), as well as higher-yielding risks assets.
Interest rate changes and asset allocations
The central bank’s global moves heavily affected traders’ positions, after a long cycle of tightening, banks started to adopt a quantitative easing position.
In June the ECB cut rates 25 basis points, which was its eighth rate reduction since mid-2024.
In April the ECB, New Zealand central bank, Australia and Canada all held their rates steady.
The Fed in the US paused in June at 4.25 to 4.50%, but still planned two rate reductions by the end of the year.
G10 central bankers had a net easing of roughly -300 basis points compared to only a +25 basis point increase at the end last month.
Changes in G10 Central Bank Policy Rates between Q1 2020 and Q2 2030 (source: LSEG).
This meant that traders moved their money away from cash/cash-equivalents to equities, high-yielding bonds and even gold. BofA analysts noted that despite the uncertainty “equities performed second best” this year (after Gold).
As a partial hedge, assets such as gold and stocks with high dividends attracted interest.
AI continues to rule the world
As a result of the ongoing AI hype, certain stocks have skyrocketed as demand for cloud and chips grew.
The data center and semiconductor industries were particularly hot. Industry leader Nvidia blew past expectations and reported $44.1 billion of revenue for the April quarter, an increase of 69% over last year.
Taiwan Semiconductor Manufacturing’s sales in Q1 2025 grew 42% year-over-year to $25.5 Billion.
Palantir, a company that specializes in AI analytics, was among the best-performing stocks of 2018, with a stock price jump of roughly 80%.
Evolving risk appetite among consumers even amid macro shocks
Early April saw the markets be shaken by President Trump’s unexpected tariff announcements. The US Indexes plummeted (S&P dropped nearly 12% in that one week), due to fears of a global recession and a possible trade war.
The VIX index (volatility) reached its highest level since 2020, as trading volumes surged (for example, on April 3, a record 26.79 Billion shares were traded).
Risk assets rose rapidly when tensions eased later (the White House deferred tariffs and began talks with China), as the Nasdaq & S&P reached new highs in June.
The US dollar has weakened dramatically, allowing for fresh investment in foreign markets and commodities.
A brief flare-up of the Middle East conflict (Israeli-Iran) in June caused an oil price spike, but no lasting damage to markets.
The most popular asset classes available on Trade W
In this context, Trade W users clearly showed their preferences for different asset classes with equity dominating the volumes.
The S&P 500, which is a large-cap U. stock index, rose by over 5% to reach record highs.
The weaker dollar also boosted trading activity across the major indexes in Europe, Asia and Australia.
The platform also attracted significant interest in a number of cryptocurrencies, and the total capitalization for the industry increased by approximately 3%. Bitcoin, with a 13% increase in value, drove the 3% rise.
Bitcoin, on the other hand, remained strong despite many altcoins falling sharply in value (Ethereum 25%, Solana 17%).
Trade W also gave a lot of attention to forex trading, as the falling US dollar attracted traders towards EUR/USD and other major cross-currencies. Commodities like Gold were also used for hedges or momentum play.
Finally, TradeWill’s analytical tools reflected the different moods of the markets in real-time.
When volatility spiked, for example (e.g. The platform experienced a spike of activity in April due to the shock tariffs.
As a result, the platform experienced rapid reallocation once news cycle shifted from negative (e.g. Trade talks are progressing, and tariff delays have been recorded.
Takeaways from the trader’s perspective
The H1 2025 market taught outsiders that traders should look ahead to develop strategies that will allow them to take advantage of the AI upswing, while still being able to withstand shocks.
It is likely that growth-oriented sectors, as well as diversified portfolios, will remain in the spotlight, despite central banks’ loosening stance.
You are in for some interesting times!
The post on Key Market Trends for H1 2025: Analyzing the Waves of Uncertainty and Surfing them may change as new information becomes available.
