July gave investors a rare breather. The FTSE 100 passed the 9,000 mark for the first time, US markets steadied after a surprise EU trade deal, and tariff deadlines briefly stopped dominating the headlines. But as ever, calm can be short-lived — and August is already shaping up to be a month of twists, with a US–China negotiation deadline looming on 12 August.

United States – relief now, questions later

A temporary truce in the tariff wars arrived when the US and EU struck a deal on 28 July, giving markets a lift. For the US, the extra import taxes could add billions to the Treasury — but they may also make everyday goods like wine, cheese, and cars more expensive for American households. In the end, inflation could be a bigger political test than stock market performance.

The UK’s side-deal on car exports looks more straightforward: 10% tariffs on the first 100,000 vehicles sold to the US, rising to 25% beyond that. Given Britain’s current export volumes, it’s a workable arrangement for our manufacturers.

The Federal Reserve held interest rates steady in July, but early August brought fresh tariffs on Canada, reminding investors that trade tensions can flare quickly.

UK – record highs, but warning lights flashing

Breaking through 9,000 points was a milestone for the FTSE 100, yet the celebration came alongside signs of slower growth and inflation at 3.6% — well above the Bank of England’s target.

Closer to home, the government’s proposal to bring pensions into Inheritance Tax from April 2027 is a reminder that planning ahead matters. Even without a formal wealth tax, speculation about broader changes persists — and the Autumn Statement could be telling.

This is where our Flourish and Protect pillars work together: helping clients grow wealth while safeguarding it against shifting tax rules.

Europe – stability with political side-effects

European markets had a strong July, boosted by banks and utilities. The EU–US trade deal bought some breathing space, but differences in interpretation — particularly around energy — could resurface. Germany is leaning on defence and infrastructure spending to support growth, though export-led industries like autos remain exposed to any new tariff disputes.

Far East – focus on China

Asian markets rallied when US trade deadlines were extended for Japan, South Korea, and Taiwan. But China’s 12 August deadline is the one to watch. While government stimulus is helping, manufacturing has slowed. Sectors like AI, robotics, and electric vehicles remain bright spots, but many investors are holding off big decisions until trade talks conclude.

Emerging markets – a mixed picture

A weaker US dollar has generally helped, but tariffs still bite. Mexico secured a short reprieve; India faced a 25% tariff on agricultural goods; and Brazil was hit hardest with a 50% tariff on many exports, though key sectors like energy were spared.

Looking ahead – staying the course

The first half of 2025 showed that markets can still rise despite political and trade turbulence. The second half has its share of unknowns — from US–China talks to UK tax changes — but for long-term investors, the fundamentals haven’t shifted.

A well-diversified portfolio, aligned with your goals, remains the best defence against short-term noise. At Questa, our focus is on helping you navigate uncertainty with clarity, structure, and peace of mind — so your plans stay on track whatever the headlines bring.