Global Index Performance

 

 

Fixed Income*

In Canada, the 10-year bond yield ended June at approximately 3.35%, close to the upper end of its range for 2025. The Bank of Canada held its policy rate at 2.75%, supported by stronger-than-expected first quarter GDP growth (+2.2%) and inflation trending toward target. The yield curve bear-steepened, with long-term yields rising by more than short-term ones, driven by improved investor sentiment and reduced demand for longer-term bonds.

In the United States, on June 18, 2025, the Federal Reserve left policy rates unchanged for the fourth consecutive meeting, maintaining a cautious stance despite cooling inflation. The Fed’s updated projections now point to two 0.25% rate cuts in 2025, down from four earlier this year. The 10-year U.S. Treasury yield fell approximately 19 basis points in June, ending the month at approximately 4.23%, as signs of softer economic momentum prompted demand for safe-haven assets.

Globally, central banks took varied approaches. The European Central Bank cut rates for the fourth time on June 11, 2025, while the Bank of England and Bank of Japan held steady, reflecting differing inflation paths.

Equities*

June delivered mixed but generally positive equity returns across regions. In Canada, the S&P/TSX Composite Index rose 2.91% during June amid strength in energy and financials, boosted by stabilized oil prices and resilient domestic data.

In the U.S., the S&P 500 Index has gained approximately 5.5% as of late June. Large-cap technology and AI-related stocks—including the "Magnificent Seven”⁶—led the charge. Like Canada, the energy and financials sectors contributed to the S&P 500's performance with support from relatively stable U.S. oil prices and healthy U.S. economic data. While global crude prices have faced challenging market conditions, U.S. energy equities benefited from short-term price stability and resilient demand within the U.S. market. The Nasdaq Index rose by 4.2% for the month of June; another strong advance following its 7.1% jump in May.

Meanwhile, international equities were relatively flat, with weakness in Europe offsetting gains in Japan. Emerging markets lagged slightly, pressured by a strong U.S. dollar and geopolitical tensions, though select Asian economies showed early signs of recovery.

Outlook and Market Trends

June underscored the resilience of global markets amid shifting macro dynamics. Easing U.S.–China trade tensions supported broad equity strength, while commodity prices were mixed. Gains in copper and uranium offset weakness in agriculture. Global crude oil prices were volatile and pressured by oversupply, the energy transition, and uneven demand, with brief spikes from geopolitical tensions. In contrast, U.S. oil prices remained relatively stable, supporting domestic energy stocks.

One of the biggest risks to equities remains the bond market, where rising U.S. debt, surging Treasury issuance, and the Trump administration’s “One Big Beautiful Bill” threaten to drive yields higher and increase borrowing costs, further adding pressure on corporate profits. In Canada, projected record debt issuance and delayed fiscal clarity continue to pressure yields, even as the Bank of Canada signals caution around household leverage and external shocks. As the third quarter begins, Canadian investors are paying close attention to trade developments, central bank policy, Canada’s fall fiscal update, corporate earnings, and the evolution of the geopolitical landscape.

Against this backdrop, Fiduciary Trust Canada’s Investment Committee opted to maintain its current positioning. With limited changes in key economic indicators and continued uncertainty around trade policy and rising U.S. debt issuance, we did not see sufficient conviction to tactically shift our strategic asset mixes at this time. Our portfolios remain broadly diversified across regions and asset classes, balancing risk management with exposure to areas of opportunity in a shifting market landscape.

*Data sourced from FactSet as of July 4, 2025.

 

 

 

1. As measured by the FTSE Canada Bond Universe Index
2. As measured by the S&P/TSX Composite Total Return Index
3. As measured by the S&P 500 Total Return Index in CAD
4. As measured by the MSCI EAFE Total Return Index in CAD
5. As measured by the MSCI EM Total Return Index in CAD
6. The “Magnificent Seven” is composed of Microsoft, Apple, Nvidia, Tesla, Amazon, Alphabet, and Meta