Published on 08 July 2025
Global markets have been moving in response to new geopolitical developments. If you’re wondering how this affects your investments, we’ve got you covered.
Here’s what happened:
TL;DR
Geopolitical tensions triggered short-term market swings this quarter – from trade policy shifts to tensions in the Middle East. But markets recovered faster than expected, with European stocks showing particular strength. Impact sectors like clean energy and healthcare continued to demonstrate long-term relevance and resilience.
A quarter of global shifts and new momentum 🚀
Let’s start with what matters most: our thoughts are with everyone directly affected by ongoing conflict in the world. The human impact of these events is profound and deeply regrettable.
The second quarter of 2025 began with a wave of political developments that caught the world’s and the market’s attention:
- In April, Donald Trump reignited global trade tensions by proposing sweeping new tariffs, raising concerns about inflation and supply chains.
- In June, conflict between Iran and Israel escalated, briefly raising oil prices.
- Meanwhile, the U.S. unveiled its “One Big Beautiful Bill”: a tax and spending package that expands defence and border funding, but rolls back key climate and healthcare policies.
Each of these developments caused short-term market reactions. But they also highlight a deeper trend: our global economy is evolving, fast.
Shifting focus – and signs of resilience 💪
At first, investors assumed a worst-case scenario in response to all of these events. Markets dropped on tariff fears. Oil prices spiked as tensions flared in the Middle East. And the “One Big Beautiful Bill” rattled bonds and raised doubts around the future of sustainable industries.
But things settled down faster than expected – and markets bounced back just as fast. Despite tension in the Middle East, oil supply was not disrupted and oil prices stabilised soon after the initial spike. Once tariff talk eased, the stock market and companies adjusted. And whilst the U.S. bill created concern, its effects were contained, especially in Europe.
Resilience took the spotlight. Stock markets recovered. And since the beginning of the year, European markets have outperformed their global peers, with broad indices achieving solid single- to low double-digit returns.
Showing that underneath the headlines, powerful long-term forces are still shaping the market. One clear example: Europe’s EUR 500 billion Green Infrastructure Fund, which is gaining momentum and helping channel investment into clean energy and resilient infrastructure. Whilst not all of this funding is directly tied to sustainability, it still represents a major step toward future-proofing the economy and accelerating the transition in key sectors.
Investor attention is shifting too: away from short-term hype, and toward long-term stability. We’re seeing renewed interest in areas like healthcare, renewables, and green infrastructure. These sectors offer long-term relevance and steady demand.
In short: markets reacted. But they’ve also recalibrated. And they’re now pointing squarely toward the future.
Impact investing is proving its value 🌿
When markets are shaken by global events, it can be easy to lose sight of the big picture. But this is where impact investing shows its true strength.
Clean energy, sustainable food systems, and health innovation aren’t trends. They’re pillars of the future economy, and they’re staying relevant no matter what politicians or headlines say. These sectors are also more rooted in local demand and less vulnerable to global trade shocks. Crucially, they benefit from powerful policy support, like Europe’s green infrastructure funding.
Long-term perspective wins 🔭
It’s natural to feel uneasy when markets fluctuate. But as history shows, staying the course often leads to better long-term outcomes.
Looking back at this year: markets dipped in April, only to rebound strongly within weeks. It’s a pattern we’ve seen time and again. Long-term investors are often best placed to benefit when markets recover – because they remain positioned for the rebound.
Impact investing is about long-term structural change, like the shift to renewable energy or the rise of sustainable healthcare. These are long-term forces that won’t be derailed by a single quarter of headlines.
By staying invested, you keep your long-term goals on track, and give your portfolio the time it need
Reach out for support
If you have any questions about your portfolio, our Customer Success team is happy to help you. You can email us at [email protected] or call +49 69 120 01237
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