Rhythm & Wealth Blog

Your resource for timely market updates, practical planning tips, and portfolio insights to help you make confident financial decisions. Our content is designed to support your journey and keep your financial life in rhythm.

Quarterly Market Update – June 2025

July 7, 2025

The second quarter of 2025 showcased both the resilience of financial markets and their sensitivity to policy uncertainty. From the White House’s tariff announcements in April to escalating tensions between Israel and Iran in June, investors faced many challenges. Yet, the stock market went on to stage one of the fastest rebounds in history and finished the quarter at new all-time highs.

Overall, it was a strong quarter for stocks, while bonds also delivered positive outcomes. For long-term investors, these events are a reminder that while headlines can drive short-term swings, maintaining perspective and staying focused on fundamental trends remains the key to achieving financial goals.

Key Market and Economic Drivers in Q2

  • The S&P 500 and the Nasdaq both ended the quarter at record highs, gaining 10.6% and 17.7% over the three months, respectively. The Dow Jones Industrial Average rose 5.0% and is 2% below its record level.

  • The Bloomberg U.S. Aggregate Bond Index gained 1.2% in the second quarter. The 10-year Treasury yield ended the quarter at 4.2% after reaching as high as 4.6% in May.

  • Developed market international stocks (MSCI EAFE) rose 10.6% and emerging market stocks (MSCI EM) increased 11.0% in the quarter.

  • Gold rallied to a new record level of $3,431 per ounce, before settling at $3,308 to end the quarter.

  • Bitcoin reached a high of $111,092 in May and hovered around $107,000 at the end of June.

  • The U.S. Dollar Index continued to fall over the quarter, ending the quarter at 96.88. It started the year at 108.49.

  • The Consumer Price Index rose 2.4% year-over-year in May, while core inflation, which excludes food and energy, came in at 2.8%.

  • The University of Michigan Consumer Sentiment Index improved in May to 60.7, its first increase in six months. Consumers expect an inflation rate of 5.0% over the next year, down from 6.6% in the previous survey.

  • At its June meeting, the Federal Reserve kept rates unchanged within a range of 4.25 to 4.5%.

Markets rebounded to new all-time highs

Despite significant volatility, the stock market recovered quickly once the worst-case scenarios for tariffs and geopolitical tensions did not materialize. The quarter began with heightened uncertainty following the announcement of new tariffs on April 2, which were more far-reaching than many investors had anticipated. However, as the administration engaged in negotiations and reached preliminary trade agreements with several partners, market sentiment improved. The Middle East conflict created a similar outcome, although markets were broadly resilient and went on to new highs after the ceasefire between Israel and Iran was announced.

The equity market rebound was widespread, with many sectors, styles, and regions delivering positive outcomes. International stocks continue to lead the way in 2025, especially with the dollar weakening. Small cap stocks have lagged other parts of the market due to their greater sensitivity to tariffs and domestic trends, and the Russell 2000 index is still down -2.5% this year.

At a sector level within the S&P 500, Information Technology stocks experienced a strong recovery and contributed toward the new market highs. Many other sectors are supporting markets too, including Industrials which are now up 11.4% on the year, Communications which have gained 10.2%, and Financials up 7.5%. On the other end, Healthcare and Energy saw weakness.

Bond markets are also quietly contributing to portfolio outcomes, with relatively strong yields and falling credit spreads contributing in the quarter. Treasury securities and corporate bonds also experienced volatility during the tariff-induced drawdown, although the quarter ended in positive territory.

The dollar continued to weaken

The U.S. dollar weakened through the second quarter despite tariff pressures. While a weaker dollar can be negative for consumers, it can be positive for U.S. businesses and exporters, since it becomes cheaper for those using foreign currencies to buy our goods. While the dollar has declined this year and is near the low end of its range since 2022, its value is still high compared to the past decade.

When it comes to monetary policy, the Federal Reserve held interest rates steady at 4.25% to 4.5% throughout the quarter, reflecting a measured approach to monetary policy in an evolving economic environment. Fed Chair Jerome Powell emphasized the Fed’s focus on price stability even as other factors complicate the economic outlook.

Specifically, the Fed’s updated economic projections reveal the challenges policymakers face. Officials now expect inflation to reach 3% in 2025 before moderating to 2.1% by 2027, marking an upward revision from earlier forecasts. They also expect real GDP growth to slow this year to 1.4%, a downgrade from a 1.7% projection in March. These adjustments reflect concerns that tariffs could spur inflation and slow growth.

The conflict between Israel and Iran added another layer of complexity to an already challenging environment. Israeli strikes on Iranian nuclear facilities and military targets beginning June 13 created immediate concerns about regional stability and potential escalation. However, the two countries agreed to a ceasefire after 12 days of fighting.

Bonds helped to provide portfolio balance

While the stock market has ended the quarter at new all-time highs, the decline and rebound was challenging for many investors. Fortunately, bonds helped to support balanced portfolios during the quarter. High yield, corporate, and Treasury bonds all provided balance and are positive year-to-date. Interest rates have remained higher than many had expected, and short-lived concerns in April about a flight from U.S. Treasury securities did not occur.

Budget discussions in Washington have brought renewed attention to America’s fiscal trajectory. The national debt now exceeds $36 trillion, or approximately $106,000 per American. According to the Congressional Budget Office, the latest budget proposal could add an estimated $3.3 trillion in deficits over the next decade. While the proposal includes spending reductions, these are outweighed by tax cuts and spending increases elsewhere.

Moody’s downgraded the U.S. credit rating in May, citing concerns about successive administrations and Congress failing to address “large annual fiscal deficits and growing interest costs.” This echoes similar challenges raised during previous budget standoffs in 2011, 2013, and from 2018 to 2019. However, in each instance, agreements were eventually reached, markets stabilized, and economic growth resumed.

For long-term investors, these fiscal debates underscore the importance of maintaining diversified portfolios that can weather various policy outcomes. While deficit levels deserve attention, history suggests that the U.S. economy’s fundamental strengths and adaptability remain intact.

The bottom line? The second quarter demonstrated both market volatility and resilience as investors navigated policy changes and global tensions. For investors, maintaining perspective and focusing on asset allocation strategies remain the most effective way to achieve long-term goals.

Copyright © 2025 Clearnomics, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via [www.clearnomics.com](http://www.clearnomics.com/) or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security–including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

Monthly Market Update – May 2025

June 3, 2025

May was a strong month for financial markets, with the S&P 500 recovering its year-to-date losses amid new trade developments, a U.S. credit downgrade, and mixed economic data. While concerns around federal debt and consumer sentiment persisted, investor optimism returned as earnings came in better than expected and trade talks made progress. For long-term investors, May is a reminder that markets are capable of adapting quickly to changing policy and economic conditions.

Key Market and Economic Drivers

  • The S&P 500 gained 6.2% in May, the Dow rose 3.9%, and the Nasdaq surged 9.6%. Year-to-date, the S&P 500 is up 0.5%, the Dow is down 0.6%, and the Nasdaq is down 1.0%.

  • The Bloomberg U.S. Aggregate Bond Index fell 0.7% for the month but remains up 2.4% year-to-date. The 10-year Treasury yield ended May at 4.4%.

  • International stocks rose, with the MSCI EAFE and MSCI EM indexes both gaining 4.0% in May.

  • The U.S. dollar index declined to 99.3, a near three-year low, reflecting fiscal concerns.

  • Bitcoin hit an all-time high of $111,092 before ending May at $104,834.

  • Gold reached a record $3,422 before closing the month at $3,288, up 24% year-to-date.

  • Inflation moderated with the Consumer Price Index rising 2.3% year-over-year in April, the lowest increase since February 2021.

  • The U.S. economy added 177,000 jobs in April, while the unemployment rate remained low at 4.2%.

Markets continued to recover despite new concerns

After a volatile April, markets rebounded strongly in May, demonstrating once again how quickly sentiment can shift. As economic data stabilized and fears around trade and inflation moderated, investor confidence returned. This month’s performance reinforces the importance of maintaining a disciplined approach to investing—especially during periods of uncertainty.

Moody’s downgraded the U.S. credit rating

Moody’s downgraded the U.S. sovereign credit rating from Aaa to Aa1 in May, citing rising deficits and long-term fiscal challenges. The downgrade followed similar moves by Fitch in 2023 and S&P in 2011. As shown in the chart above, total U.S. debt rose to 122% of GDP, while net debt reached 97%.

Despite this headline, markets responded calmly. Many investors viewed the downgrade as overdue and largely symbolic. Treasurys remain a safe haven asset, and demand for U.S. debt continues amid global uncertainty. The muted reaction recalls the aftermath of the 2011 downgrade, which had little long-term market impact.

Coincidentally, the downgrade came just as the House passed a new tax and spending package, extending provisions from the 2017 Tax Cuts and Jobs Act. According to the Penn Wharton Budget Model, the bill could add $2.8 trillion to the deficit over the next decade. The legislation now heads to the Senate for debate and potential revision.

Trade negotiations show progress

Trade policy was another bright spot in May, with the U.S. reaching new agreements with the U.K. and China. The U.S.-China deal included a 90-day reduction in tariffs, helping to ease tensions. Negotiations with the EU also progressed, with a 50% tariff delay signaling diplomatic flexibility.

Nonetheless, challenges remain. Legal battles over the President’s tariff authority have introduced new uncertainty, and both the U.S. and China have accused one another of violating the current truce. Still, May’s developments show that diplomatic solutions are possible, even in a contentious environment.

As with many policy issues, trade takes time to unfold. Investors should avoid reacting too strongly to headlines and instead focus on long-term fundamentals. May’s rally suggests the worst-case trade outcomes may be avoidable.

Steady earnings growth supports market

Corporate earnings were another source of strength in May. According to FactSet, 64% of S&P 500 companies beat revenue expectations in the first quarter, with positive EPS surprises as well. Technology companies led the way, showing resilience despite trade and policy headwinds.

On the consumer front, sentiment remained subdued for much of the year. However, May saw a slight improvement in expectations. The University of Michigan’s survey reported stabilizing inflation forecasts and a modest rise in consumer confidence—potentially signaling alignment between economic reality and public perception.

The bottom line? May was a strong month across asset classes, reminding investors that markets often recover quickly from setbacks. With progress on trade, stable earnings, and muted responses to fiscal headlines, long-term investors are well-served by focusing on enduring trends—not short-term uncertainty.

Copyright © 2025 Clearnomics, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via [www.clearnomics.com](http://www.clearnomics.com/) or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security–including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

Monthly Market Update – April 2025

May 2, 2025

April was one of the most volatile months in history as markets reacted to new tariff announcements. However, even though the S&P 500 fell as much as 12% during the month, the index rebounded and closed within one percent of where it started. Recent data also showed that the economy shrank slightly in the first quarter as companies stockpiled imported goods ahead of new tariffs. While bonds and international stocks were also volatile, they both contributed positively to diversified portfolios. This is yet another reminder of the importance of staying invested and diversified in times of uncertainty.

Key Market and Economic Drivers

  • The S&P 500 fell 0.8% in April, the Dow Jones Industrial Average fell 3.2%, and the Nasdaq rose 0.9%. Year-to-date, the S&P 500 has declined 5.3%, the Dow 4.4%, and the Nasdaq 9.7%.

  • The Bloomberg U.S. Aggregate Bond index gained 0.4% in April and is up 3.2% year-to-date. The 10-year Treasury yield ended the month at 4.16%, but was as low as 3.99% and as high as 4.49% over the month.

  • The U.S. dollar index fell 4.5% to end the month at 99.5, near a three-year low.

  • Bitcoin fell to $77,052 during the month, but ended at $94,581.

  • The Consumer Price Index rose 2.4% in March compared to the prior year, slower than expected and the lowest reading since last September.

  • Retail sales fell 0.9%, including a 1.9% decline in nonstore retail sales (i.e., online shopping). The household savings rate rose slightly to 4.6% but is still below the historical average of 6.2%.

  • The economy shrank slightly with GDP falling 0.3% in the first quarter, the first decline since Q1 2022. A significant increase in import activity drove this decline.

Lessons on staying invested after a volatile month

Once again, April demonstrated the importance of being prepared for market uncertainty. The month began with the White House’s April 2 tariff announcement on nearly all trading partners. These tariffs were far higher than investors had expected, leading to fears of rising inflation, a global economic slowdown, and a trade war. Stock markets reacted with the sharpest declines since the pandemic.

Stock market volatility jumped in April

 

The administration’s decision just days later to implement a 90-day pause for most countries helped fuel a market recovery. Additional exemptions on tariffs with China, including on technology products, further calmed investors’ nerves.

Despite significant swings throughout the month, major indices closed with only modest changes. Diversified portfolios also benefited from bond returns and a rally in international stocks. So, while the S&P 500 is down about 4.9% for the year with dividends, many balanced portfolios are closer to flat.

The accompanying chart shows that the VIX index, a key measure of market volatility, briefly crossed 50 for the first time since the pandemic. However, many of the largest declines during the month were followed by significant rebounds. This is a reminder that market swings can move in both directions, and trying to time these moves can often be counterproductive.

While markets have stabilized somewhat more recently, uncertainty remains and many of the drivers of April’s volatility will continue to be in focus. The situation around trade policy is still evolving, although the 90-day pause suggests that the worst-case scenarios may be less likely. Investors should expect that tariff headlines could continue to drive volatility in the near-term, even as markets adapt to the new trade landscape.

GDP declined in the first quarter

 

One of the key concerns among investors is whether tariffs will drive inflation higher and growth lower. The latest economic reports show that the economy shrank slightly in the first quarter, with GDP declining by 0.3% over the period, the first contraction since early 2022. This is due almost entirely to trade as businesses accelerated their imports to stockpile inventory. Consumer spending slowed but remained positive. It’s important to note that these figures are only the first estimate of GDP and are subject to change.

As the accompanying chart shows, consumer spending has been a key driver of economic growth in recent years. The latest surveys suggest that consumers expect a rapid acceleration in prices over both the coming year and in the longer run, resulting in historically low consumer confidence. While this has not yet impacted consumer spending or inflation in a significant way, it could be an important factor in the coming months.

The mixed picture on economic growth and inflation also makes the Fed’s job more difficult. Not only does the central bank face challenging interest rate decisions in the coming months, but its independence was briefly called into question by the White House, driving further market uncertainty. At the moment, markets expect the Fed to cut rates about four times this year, possibly beginning in July.

These events also resulted in unusual bond market swings, although they ended up near where they started. The 10-year Treasury yield ended the month at 4.16%, while corporate bonds saw yields edge higher. Some investors worried about a flight from U.S. assets, especially with the U.S. dollar falling to multi-year lows.

Staying invested has historically been rewarded

 

In the face of recent challenges, one investment principle remains clear: staying invested through periods of volatility has historically been an important path to long-term financial success. The accompanying chart demonstrates the potential cost of attempting to time the market every time a 2% decline (or worse) occurs. Since positive and negative days often occur at unpredictable times, exiting the market after negative days, even for a short period, can backfire. The temptation to time the market may be even greater in today’s market and economic environment.

While increased volatility can be unsettling, it’s in times like these that focusing on your financial plan, portfolio construction, and areas of opportunity is most important. Market volatility often results in attractive valuations across many asset classes, offering potential opportunities for those in search of greater diversification and balance in their portfolios. The S&P 500, for instance, has seen a significant improvement in its price-to-earnings ratio this year.

The bottom line? Market volatility in April is a reminder that short-term market swings can occur without notice. History repeatedly demonstrates that disciplined investors who focus on their long-term financial plans will be better positioned to achieve their goals.

Copyright © 2025 Clearnomics, Inc. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via [www.clearnomics.com](http://www.clearnomics.com/) or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company’s stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security–including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

Hello World – And Welcome to Circadia

May 2, 2025

At Circadia, May 1 marks more than just the official launch of the firm—it marks the beginning of a conversation we plan to carry forward with depth and intention.

The Rhythm & Wealth Blog was created to help you stay in sync with your financial life. Here, you’ll find practical insights on topics like goal and retirement planning, education funding, tax-smart strategies, and investment management. We’ll also share timely market updates and perspectives to help you cut through the noise and stay focused on what truly matters.

The name Rhythm & Wealth reflects our belief that financial decisions shouldn’t be reactive—they should flow with the cadence of your life. That means adapting your plan as your goals evolve, the markets shift, and new opportunities arise. When your financial strategy is aligned with your values and priorities, it’s easier to move forward with clarity and confidence.

This blog is designed to be a steady resource—whether you’re facing a big financial decision or simply want to stay informed. Our goal is to make complex topics accessible and actionable, so you can make progress one step at a time.

We’re excited you’re here. Check back regularly for updates, and if there’s a topic you’d like us to cover, don’t hesitate to reach out.

Here’s to finding your rhythm—and building lasting wealth along the way.

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