Trade Tensions Tamed: U.S. Strikes Deals, Markets Power On

U.S. equities, in particular, have performed strongly. The S&P 500 has reached new highs again, buoyed by solid earnings from Alphabet (Google), Netflix and Tesla. 

These earnings have helped reinforce investor confidence in the growth outlook, despite ongoing macroeconomic challenges. 

Tesla’s shares did fall around 8%, largely due to tariff concerns. However, as always, it’s important not to react to individual share price drops and, instead, consider the broader market picture. 

As former MicroStrategy CEO Michael Saylor pointed out, just 4% of U.S.-listed companies have generated the entire net gain of the stock market since 1926. The remaining 96% have collectively performed no better than Treasury bills. 

The real challenge is knowing which 4% will deliver that outperformance ahead of time – which is precisely why we focus on index investing. 

Vanguard founder John Bogle said: “We don’t try to find the needle; we just buy the haystack.” In other words, diversification is key. And holding investments for longer periods allows you to ride out short-term market fluctuations and take advantage of the market's long-term growth potential. 

By focusing on long-term goals and remaining disciplined, you’re more likely to benefit from higher returns over time.

Historically, the market reaches all-time highs in most years. In fact, the S&P 500 has hit highs on 14 separate days so far in 2025. The average annual number is 21, so this year is tracking fairly typically. 

In 2024, we saw 57 all-time highs, while 2022 and 2023 combined had just one. Meanwhile, during the so-called "lost decade", there were only 13 in total – quite a contrast. 

All-time highs are a normal part of market momentum. A high number of all-time highs in one year doesn’t necessarily mean the following year will underperform. The market is built to rise over time. 

It’s been a good week for UK and European equities, both of which showed steady gains. 

Meanwhile, Japan did well off the back of a positive trade deal development with the U.S. 

The country’s push to spark growth is also catching investors’ attention, with government support and structural reforms aimed at boosting productivity and innovation. 

It’s the kind of long-term thinking that helps drive stronger, more profitable companies over time.

The U.S. government is set to borrow up to $670 billion this quarter through short-term bonds – or T-bills – which are proving popular with investors. With yields north of 4.35% and low sensitivity to rising interest rates, they offer both income and flexibility. You can move quickly if the market shifts. 

The yield curve – the gap between short- and long-term interest rates – remains flat, signalling uncertainty. It’s steepened a touch lately, suggesting some expect rates to ease gradually. Long-term yields are being kept in check by steady demand from pension funds and overseas buyers. 

Investors are also favouring high-quality corporate bonds, which offer more yield than government debt with less risk than equities. There’s a bit of caution around lower-rated bonds, though – spreads aren’t particularly generous right now. 

Overall, the bond market is delivering a steady, if cautious, return profile. Bonds don’t grab headlines like equities, but they play a vital role – adding stability when things get bumpy. 

A well-balanced mix of bonds can help keep your portfolio moving forward, especially when uncertainty is in the air.

In times like these, when headlines shift quickly and markets respond in real time, it’s easy to get caught up in the short-term noise. But history shows that time in the market, not timing the market, is what drives long-term success. 

Consistently investing, staying diversified, and holding your nerve through ups and downs is what delivers meaningful results. 

At Hoxton Wealth, we’re here to help you stick to that path. Whether you’re investing for retirement, planning for the future, or just looking to grow your wealth steadily, we focus on long-term strategies that align with your goals – backed by insight, expertise, and a steady hand. 

Our client services team is here to support you – they can be reached by email at client.services@hoxtonwealth.com or on WhatsApp through our new global client services WhatsApp number: +44 7384 100200  

Success isn’t about reacting fast – it’s about staying the course with purpose.