It’s hard to believe we are already past the halfway mark of 2025. Markets continued to navigate the effects of trade policy shifts, geopolitical unease and ongoing inflationary concerns. The second quarter of the year concluded amid an evolving global landscape, with markets continuing to navigate the effects of trade policy shifts, geopolitical unease, and persistent inflationary concerns. Interestingly however, while global sentiment remained fragile and cost of living dominates the headlines, the Irish market showed relative stability.
Ireland: Current Economic Overview
Latest data through June indicates that the Irish economy is continuing to demonstrate resilience in the face of global uncertainty. GDP growth remains positive, supported by ongoing strength in exports. Inflationary pressures have stayed relatively contained, with the Consumer Price Index (CPI) hovering around 2.4% by quarter-end. This has been aided by sustained lower energy prices and the continued impact of targeted government supports.
The ECB maintained its base rate at 3.25%, signaling a continued pause in tightening amid mixed economic signals across the eurozone. Domestically, consumer sentiment has remained cautious but shows a slight improvement in June 2025.
In equity markets, the Irish stock market held steady, with notable outperformance in technology, healthcare, and export-led sectors. The retail and discretionary consumer sectors continue to lag, reflecting more cautious household spending patterns. Political stability has helped anchor market confidence, with little disruption from the earlier government transition.
Global Market Developments
Globally, markets continued to react to the implementation of wide-ranging U.S. trade tariffs announced earlier in the year. The fallout from these policies intensified during Quarter 2, leading to further market volatility and heightened investor anxiety. This was particularly evident in emerging markets and export-reliant economies.
In the U.S., equity markets saw a volatile quarter with major indexes down 5–8% amid concerns about retaliatory trade measures, supply chain disruptions, and slowing corporate earnings growth. But despite these headwinds, sectors such as energy and defence posted modest gains. European markets fared relatively better, buoyed by stable inflation, cautious optimism over Central Bank policy, and selective strength in industrials and financials.
Looking Ahead
As we move into the second half of the year, U.S. trade policy remains the most disruptive global risk. The full economic impact of tariffs is likely to become more visible before the end of the year. Markets are expected to remain sensitive to developments on this front, particularly as the U.S. election cycle once again gains momentum.
Monetary policy divergence among major central banks, along with inflation expectations and corporate earnings trends, will also be key in shaping investment outcomes. Volatility is likely to persist, but long-term opportunities remain. On the domestic front, Budget 2026 and cost of living supports are already making headlines and there is much debate ongoing.
Despite these near-term uncertainties, we continue to stress the importance of a long-term perspective. A diversified investment approach coupled with robust financial planning remains the most effective way to navigate market uncertainty.
