Check-Up Time: A Mid-Year Market Review

Imagine that at the start of the year, you were told over the next six months you’d see higher U.S. import tariffs, rising global trade tensions, shrinking gross domestic product (GDP) in the first quarter and an escalating conflict in the Middle East.

With that context, you were asked to predict the S&P 500^® Index return for the first half of the year. What would you have guessed? Do you think you’d have guessed more than 6% — on pace to top the market’s average annual return of about 10%?

While that’s what has happened, it may seem remarkable that the market has faced such uncertainty and still delivered relatively strong returns. Of course, this simple summary doesn’t tell the whole story of the year's first half. Neither can a single chart, but it can get a lot closer.

For a more in-depth look back on the news and events of 2025, Figure 1 presents many of the major headlines atop the cumulative return of the S&P 500.

Volatility and Volume in Focus

In Figure 2, we present other interesting data points from the market that highlight what an incredible six months it has been. The magnitude of the highs and the lows, both over very short and longer periods, really stands out.

This year, we’ve experienced some of the largest single-day market returns on record. The 9.5% rise for the S&P 500 on April 9 — the day President Donald Trump issued a 90-day tariff pause — was the largest daily gain since 2008 and the third largest since the index launched in 1957. This followed the 6.0% decline on April 4 — shortly after sweeping U.S. tariffs were announced — the 19th largest daily loss for the index.

There have also been nine S&P 500 all-time highs this year, some of which bookended notable subperiods for the market in 2025. One occurred on February 19, just before the index faced its largest drawdown of the year at nearly -19%, ending on April 8. Thereafter, the index rose almost 25% to end June again at a new all-time high.

These numbers provide helpful context for the investor experience over the period.

Staying Disciplined Amid Market Uncertainty

If you’re looking for salient takeaways from a period high on uncertainty, we have a few to share.

• First, we should remember that our sentiment on the market or economy won’t always match how the market actually performs. We tend to weigh heavily what we perceive as bad news versus what we see as good news. This is normal, but it can lead investors to act on emotion driven by uncertainty and short-term pessimism. History has shown that doing so often results in poor portfolio outcomes.

• Second, we should remember that markets constantly process the news, regardless of whether we individually see something as good or bad, and set prices that reflect aggregate, forward-looking expectations. In other words, markets look ahead, not just at what has happened, and price securities for positive expected returns going forward.

• Finally, the near-term ups and downs can feel — and be — extreme in the moment. The aforementioned emotions and urge to “do something” can be intense. Investors experienced this in late February, March and early April.

But, as we also saw unfold over the next two months, those who kept a long-term view and remained disciplined in the face of uncertainty were again rewarded. The long-term plan you have set up shouldn’t be forgotten in times of market stress. It’s likely most useful in those very periods.