The U.S. stock market has experienced significant fluctuations in the first half of 2025, but despite the volatility, it has delivered solid returns for investors. The S&P 500 index, which tracks many of the largest stocks in the U.S. market, returned 10.9 percent, including dividends, for the three months through June and 15.2 percent for the past 12 months. These returns are excellent by historical standards, surpassing the long-term annualized return of the S&P 500 since 1926.
However, the first six months of 2025 have not been without challenges. The market experienced a sharp decline from February 19 through April 8, largely due to the imposition of steep tariffs, the highest in a century. While tariffs remain a concern, ongoing negotiations have helped calm the markets.
Despite the rebound, the S&P 500’s 6.2 percent total return for the first half of 2025 is merely average compared to recent years. It trails the 15.3 percent total return seen in the first six months of 2021 under President Joseph R. Biden Jr. and the 9.3 percent return in 2017. Investors with global holdings have benefited from even stronger performances in markets outside the United States.
Solid S&P 500 returns
This has amplified the returns for U.S. investors with diversified portfolios. While there are still numerous concerns for investors to consider, the overall performance of the financial markets at mid-year 2025 has been respectable. The resilience of the markets in the face of continual shocks, uncertainty, and periodic price declines has been remarkable.
As the year progresses, investors will need to remain vigilant and adapt to ongoing developments in tariff negotiations, economic conditions, and other factors that may impact the markets. However, the solid returns delivered in the first half of 2025 provide a positive foundation for investors as they navigate the challenges and opportunities that lie ahead.
