Navigate July 2025 with Our Market Outlook & ETF Strategy Guide

From trade talks to tech rallies—your guide to ETFs and market moves this week.

Fireworks, Fundamentals, and Flexibility: Weekly Market & ETF Outlook for July 2025

Looking for the best ETFs for July 2025? This weekly market outlook will help you understand how to invest during volatility and leverage the smartest ETF strategies for July 2025. We’ll cover key themes, potential opportunities, and risks setting the tone for the week ahead.

Key Themes to Watch This Week

1. Geopolitical Calm and Trade Developments

Following recent de-escalation in the Middle East and progress in US-China trade talks, markets have bounced back strongly. The suspension of new tariffs and diplomatic advances have lifted indices like the S&P 500 to record highs. However, the July 2 tariff deadline remains a potential source of volatility.

2. Economic Data Spotlight: What to Expect

This week’s highlight is the US June nonfarm payrolls report due Thursday. Economists forecast 115,000 new jobs, slightly down from May’s 139,000, signaling a modest cooling in the labor market.

Other important data include:

• Retail sales

• Consumer spending

These reports will shed light on inflation trends and economic growth momentum. Markets will be sensitive to any signs of economic slowdown.

3. Central Bank Policy and Rate Cut Expectations

Better-than-expected inflation data from Australia have increased expectations for an early Reserve Bank of Australia (RBA) rate cut in July. In the US, investors are pricing in a potential Federal Reserve pivot toward easing later this year if inflation continues to ease.

Top ETFs to Watch This Week

ETFs remain a favorite tool for diversification and risk management, especially amid volatility.

Concrete Investor Recommendations

• Monitor US economic data closely:
  For broad market exposure reflecting economic trends, consider ETFs like SPY or VOO.

• Watch trade-related risks:
  Sectors sensitive to trade may benefit from improved conditions. Look at industrial ETFs such as XLI or materials ETFs like XLB.

• Diversify with thematic growth ETFs:
  For exposure to technology and digital assets, check out VanEck Digital Transformation ETF (DAPP) or Invesco NASDAQ Next Gen 100 ETF (QQQJ).

• Manage risk and income:
  Defensive and income-focused ETFs like SPDR SSGA IG Public & Private Credit ETF (IGPB) or iShares Managed Futures Active ETF (ISMF) can help hedge macro uncertainty.

Risks to Keep an Eye On

• Potential tariff renewals:
  Failure to extend tariff agreements could trigger market turbulence.

• Labor market weakness:
  A sustained drop in jobs could weigh on consumer spending and growth.

• High valuations:
  The S&P 500 trades near 23.3x forward earnings, which may reflect elevated expectations.

• Geopolitical flashpoints:
  Any resurgence of global conflicts could derail market gains.

Expert Insight

“Since May, we believe there’s enough market capitalization to push the S&P 500 to new highs. However, there’s a fine line between hitting a peak and a sustained breakout, and we haven’t yet seen signs that this breakout will last,” said Ari Wald, Head of Technical Analysis at Oppenheimer.
He added that only 44% of Russell 3000 stocks trade above their 200-day moving averages, so broader market participation is needed for the rally to continue.

Summary: Positioning for July 2025

This week offers a unique chance to combine market fireworks with solid fundamentals and flexible ETF strategies. Key takeaways:

• Stay alert to major economic releases

• Monitor trade developments closely

• Use ETFs to diversify and protect your portfolio

• Balance risk and growth potential thoughtfully

With the right approach and ETF selection, you can effectively invest during volatility and capitalize on July 2025’s market trends.