History is unkind to those who mistake motion for progress. The violent equity drawdown in April, followed by an equally intense rebound in early May, has left investors torn between relief and suspicion. But market participants have been here before.
June marked a turning point, but not because risks disappeared, but rather because investors stopped fearing them. Equity markets surged to new highs, not in spite of tariffs, fiscal strain, and geopolitical shocks, but because those threats proved manageable. The "wall of worry" is still standing, but markets are sprinting up it.
Markets in May were anything but quiet. What began with elevated anxiety fueled by escalating trade rhetoric and surging bond yields, quickly pivoted into a broad-based rally, as investors responded to a series of headline-driven shifts. At the center stood President Trump, whose abrupt softening on China tariffs and temporary delay of punitive measures against the EU triggered a powerful reversal in sentiment.
July did not break the trend, it tested its depth. After a record-setting first half, global markets entered a phase of quiet recalibration. The S&P 500 edged slightly higher, with leadership rotating out of mega-cap tech and into laggards such as utilities and industrials.
August carried the imprint of resilience, though it was far from a straight line. The month opened on a sour note as new U.S. tariffs took effect and payroll revisions revived doubts about the labour market’s strength. Yet those concerns quickly gave way to renewed optimism.
In recent years, private equity buyout funds and private credit vehicles saw unprecedented growth in fundraising and deal activity. However, a sharp shift in the macroeconomic environment has introduced significant challenges.
