At the halfway mark: What the 2025 markets have - and haven’t - told us

Six months into 2025, the only thing markets had made clear was how unclear everything still is. A sharp sell-off in April followed by an equally swift rebound left investors with more questions than answers. The macro signals remain mixed, policy direction is far from settled, and asset performance seems to shift week by week rather than by sector or geography. In that sense, 2025 has resisted easy classification: it is neither a textbook recovery nor a broad retreat to safety. Instead, it’s proven to be more fluid, more tactical, and more dependent on timing and agility than in recent cycles.

Clarity is not a given

Much of the volatility in Q2 was reflexive, not directional. The Nasdaq shed over 20% in April before recouping its losses by June. The S&P 500 followed a similar trajectory, ending the half up 5.3% year-to-date—though that figure conceals the sharp swings it endured along the way. These movements weren’t grounded in upgrades to earnings or economic outlooks. They were sparked by headlines and driven by positioning shifts.

No single centre of gravity

One of the defining features of this cycle is the absence of a clear market leader. U.S. tech rebounded strongly in Q2, but not across the board. Cyclicals have had moments of strength, but haven’t sustained momentum. Commodities responded more to geopolitics than to supply-demand fundamentals, and fixed income flows have remained concentrated in the short end of the curve. The result is dispersion.

The Hang Seng was one of the best performers globally in H1, up over 20%, while the Nikkei declined slightly despite a supportive currency backdrop. In Europe, the FTSE 100 and DAX posted healthy gains, driven in part by defensive sectors and FX tailwinds. And in the Middle East, the picture was mixed: Abu Dhabi’s ADX rose 5.2%, Dubai’s DFM added 3.4%, while Saudi’s Tadawul dipped slightly. More notably, capital flows from the region showed an outward-looking investor appetite for global assets like US Treasuries and infrastructure-linked private funds.

The rise of metals and moderation

The standout performers of H1 were gold and silver. Gold rose 27.39%, while silver gained 25.55%, with much of the buying driven not by retail flows but by institutional positioning and central bank accumulation. With the dollar weakening and real yields compressing, the appeal of metals as an inflation and volatility hedge has reasserted itself.

Brace for a second half that rewards preparation

As the second half begins, the macro picture remains event-driven, but not unstable. The risks that triggered April’s correction have not fully disappeared. The Fed’s next move could shift sentiment abruptly. U.S. elections and geopolitical realignments will continue to inject uncertainty. At the same time, inflation is trending lower in key markets, labour markets remain resilient, and recession concerns, while still present, are far less acute than they were a year ago.

For investors, the imperative is not to chase the next rally or brace for collapse, but to build portfolios resilient enough to accommodate both. That means revisiting sector exposures, managing concentration risk, and holding enough liquidity to act on opportunities without being forced into them. It also means understanding that the next 5% up or down may come from a headline, not a thesis, and positioning accordingly.

If H1 was a test of patience and positioning, H2 is likely to be a test of discipline.

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