Weekly Market Commentary - July 28, 2025

Week In Review

Major U.S. equity indices moved solidly higher, with the S&P 500 and the Nasdaq Composite hitting record levels for a second consecutive week. Market sentiment was heartened by the results of trade negotiations and second quarter corporate earnings reports that beat analyst expectations. U.S. President Donald Trump finalized new trade agreements with several countries over the week, including Japan, Indonesia and the Philippines. The deal with Japan is particularly meaningful. It imposes a 15% tariff on Japanese imports and expands market access for U.S exports, critical first steps in resolving a persistent trade imbalance that has existed for over six decades.3 The pact also serves as a framework for future accords with other countries that frequently maintain a trade surplus with the U.S. Sure enough, Trump announced a deal with the EU on Sunday night that levies similar 15% tariffs on European goods and provides for $750

billion of energy purchases and $600 billion of further investments into the U.S.4 Favorable corporate earnings reports also reinforced equity momentum. To date, 169 S&P 500 companies have reported financial results and more than 82% have beaten Wall Street’s expectations. 5 Alphabet was a notable performer, increasing year-over-year revenues by 14% and lifting capex guidance to $85 billion due to higher demand for cloud services. The S&P 500 rose +1.5% on the news and closed at a new high of 6,389.

This Week

Inflation and labor market updates will share center stage with the fifth FOMC policy meeting of the

year. The earnings season resumes with 164 S&P 500 companies airing results, including Apple, Amazon and Meta.6

Portfolio Theme

Trade policy uncertainty was justification for lowering earnings estimates. The “low bar beat” effect is driving good market momentum, but financial health and strong future guidance are more important. Simplicity offers portfolios of high-quality companies that will tend to outperform over time.

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Data: Unless otherwise noted, data for charts, graphs, and tables is sourced from YCharts. Portfolio Themes chart sourced from J.P. Morgan Asset Management. 1Style box returns use various Russell indices tied to specific areas of the market cap (vertical) and style (horizontal) spectrums.

2 Index Statistics: P/E Ratio – Displays the forecasted P/E ratio of the representative index ETF. Yield - Dividend-per-share divided by current share price. Table statistics are updated weekly. MSCI indices represent broad global and international equity markets. Indices are represented by iShares ETF proxies (IVW, IVV, IVE, ACWI, and ACWX). Past performance does not guarantee future results.

3 ESBCO Information Services.

4 CNBC.

5 FactSet.

6 FactSet.

Weekly commentary and investment advisory services are provided by Simplicity Wealth, LLC a SEC Registered Investment Adviser. Registration does not imply a certain level of skill or training. The information provided is for informational purposes only and does not constitute any form of advice or recommendation. The information contained within has been obtained from various sources and is believed to be accurate at the time of publication.