By Silvano Grimaldi, CEO of the independent asset management firm Grimaldi & Partners AG.
Monthly Review
International equity markets ended July 2025 with gains.
Positive Factors
Strong Q2 corporate earnings and outlooks: Many companies exceeded earnings expectations during the second quarter, strengthening investor confidence. Major indices such as the S&P 500 and Nasdaq particularly benefited from robust quarterly results and positive corporate outlooks.
Easing inflation and interest-rate concerns: Although the US economy continued to grow, recent data indicated a slight slowdown in inflation and consumer spending. Investors expected that the Federal Reserve would at least refrain from further interest-rate increases during late summer or autumn, while some anticipated that interest-rate cuts could begin soon.
Technology and artificial intelligence rally: Continued strong demand for artificial intelligence and cloud infrastructure primarily supported technology stocks. Semiconductor and software companies were among the leading performers and accounted for a significant proportion of the market gains.
Weaker US dollar: A significantly weaker US dollar in July made US equities more attractive to international investors while also supporting European shares when measured in dollars. The MSCI Europe Index particularly benefited from this currency development.
Easing trade-policy tensions and transatlantic discussions: Despite threats of US tariffs on European Union exports, market participants initially viewed the tensions as limited. The prospect of further negotiations between Washington and Brussels reduced concerns and lowered the risk of an escalation in trade relations.
Stock in Focus
Meta Platforms Gains Approximately 11.5% Following Strong Q2 Results
Meta Platforms gained approximately 11.5% in July following stronger-than-expected results for the second quarter of 2025.
The company reported earnings per share of USD 7.14, compared with a forecast of USD 5.88, while revenue reached USD 47.52 billion, exceeding the expected USD 44.83 billion. Both figures were significantly above analysts’ estimates.
Following the announcement, Meta shares rose by approximately 10% in after-hours trading.
CEO Mark Zuckerberg emphasised the company’s extensive focus on artificial intelligence and presented its broader vision of developing “superintelligence”.
The strong quarterly results reflected both the resilience of Meta’s core advertising business and its substantial investments in AI infrastructure and Reality Labs.
Outlook – August 2025
Opportunities
Approval of major US infrastructure packages: The US Congress is expected to approve a substantial infrastructure package in August, involving significant investment in transport, energy and digital networks. These measures could support growth in important US sectors such as construction, technology and renewable energy, strengthening equity markets on both sides of the Atlantic.
US–EU trade framework reduces tariff risks: Under the agreement reached on 28 July, the US import tariff initially announced for 1 August would be reduced from 30% to 15%. This easing of tensions reduces pressure on transatlantic trade, improves planning certainty for exporters and could support industrial, automotive and pharmaceutical stocks in both regions.
Continued momentum in technology and artificial intelligence: Strong Q2 results and continued investment in artificial intelligence have supported technology, semiconductor and cloud companies in recent months. Many market participants see further upside potential in August as innovation and follow-up orders continue.
Risks
Seasonal volatility in August: Historically, equity-market gains tend to weaken during August due to lower summer trading volumes and seasonal technical factors. Analysts have warned of increased volatility and possible corrections following the July rally.
Risk of higher US tariffs from 1 August: If no final agreements are reached by the deadline, higher tariff rates could be reintroduced. Export-oriented sectors such as automotive manufacturing and mechanical engineering would be particularly exposed.
Risk of geopolitical escalation in the Middle East: A renewed escalation in the conflict between Iran and Israel could cause oil and gas prices to rise sharply in the short term and trigger a flight to safety, resulting in losses across equity markets. Although this risk is considered moderate, it remains a potential source of market turbulence.
Performance Expectations
For August 2025, we expect a slightly negative trend in international equity markets.
Stock Recommendation: Meta
This publication is provided for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any financial instrument. Past performance is not indicative of future results.
