Markets at highs, policy in flux
Markets reached new highs in July, but beneath the surface, concentration risk and valuation concerns are growing—especially in the U.S., where the top 10 stocks now dominate index performance. Diversification across regions and sectors remains essential.
Meanwhile, the Fed held rates steady, but political pressure and stronger-than-expected economic data have clouded the outlook. A dovish pivot seemed likely until late-month surprises—including robust GDP and jobs numbers—prompted markets to reassess. Equity indices pulled back, and yields rose, reflecting renewed uncertainty.
On the trade front, Canada faces a 35% tariff on non-CUSMA goods starting August 1, yet markets have responded with surprising calm. While energy and potash are exempt, other sectors may feel the pinch in Q3. Overall, the environment remains supportive but fragile.
