What Should Investors Know About the 2025 Midyear Market & Economic Update?
2025 has been full of economic headlines: a sweeping new tax law, changing market sentiment, growing global tariff uncertainty, and AI-driven disruption reshaping how we invest. But how much of the noise should you listen to?
In our 2025 Midyear Market & Economic Update, John Vance breaks it all down so you can cut through the hype and make confident financial decisions. Whether you’re a retiree, high-income earner, or business owner, this is your go-to guide for what matters now and how to plan for what’s next.
Watch the full video below or skip to the section that matters most to you.
Table of Contents:
- What’s Driving the 2025 Economic Outlook?
- How Are Tariffs Impacting the Global Economy in 2025?
- What Are the Key Tax Changes in the 2025 OBBBA Law?
- Should You Invest in Real Estate, Gold, Oil, or Crypto in 2025?
- What’s Behind the Growth of the Magnificent Seven Stocks?
- What Can Today’s Market Learn from the Dot-Com Bubble?
- Should You Just Invest in the S&P 500 in 2025?
What’s Driving the 2025 Economic Outlook?
Despite early 2025 predictions of economic slowdown, the U.S. economy continues to surprise. Recession risk has dropped significantly. Stronger-than-expected GDP growth and improving productivity are creating a more optimistic economic foundation.
Key Takeaways:
- GDP growth is exceeding forecasts
- Long-term productivity is the biggest challenge
- The U.S. labor shortage will likely require a combination of immigration policy and tech innovation
Who This Impacts: Long-term investors, retirees, and anyone sitting on the sidelines with excess cash.
How Are Tariffs Impacting the Global Economy in 2025?
Tariffs are back in a big way. With the average effective rate nearing 15%, businesses are bearing the brunt—not consumers. Policy uncertainty remains the greatest risk, especially to global supply chains and corporate earnings.
Key Takeaways:
- Corporate America is absorbing tariff costs
- Uncertainty is delaying economic decisions
- Reshoring is a key U.S. policy goal moving forward
Who This Impacts: Business owners, corporate investors, and globally diversified portfolios.
What Are the Key Tax Changes in the 2025 OBBBA Law?
The One Big Beautiful Bill Act (OBBBA) is the biggest tax reform since 2017. From middle-class deductions to new planning rules for business owners and retirees, there’s a lot to unpack.
Key Takeaways:
- SALT deduction cap increased to $40K for most (but not high earners)
- New deductions for retirees age 65+
- Tips and overtime are temporarily excluded from federal income tax
- Trump Account: New tax-advantaged savings for children
- Bonus depreciation restored to 100% and QBI thresholds expanded for businesses
Who This Impacts: Virtually every client segment: families, retirees, W-2 earners, and business owners.
Should You Invest in Real Estate, Gold, Oil, or Crypto in 2025?
From slowing home appreciation to crypto clarity and gold price surges, alternative asset classes are seeing their moment. But which ones are truly inflation-resistant?
Key Takeaways:
- Home prices are stabilizing after an unsustainable run
- Gold isn’t a consistent inflation hedge
- Crypto is maturing, thanks to new regulation and Bitcoin ETFs
Who This Impacts: DIY investors, crypto-curious clients, and real estate-heavy portfolios.
What’s Behind the Growth of the Magnificent Seven Stocks?
Big Tech’s rally continues to dominate headlines, with Nvidia reaching a $4 trillion market cap. But do these companies’ earnings justify their valuations?
Key Takeaways:
- MAG7 makes up 20% of global market cap but only 11% of earnings
- Future growth may be priced in too optimistically
- Diversification is more critical than ever
Who This Impacts: Tech-focused investors, growth chasers, and equity-heavy portfolios.
What Can Today’s Market Learn from the Dot-Com Bubble?
Today’s tech surge looks a lot like the dot-com boom. But what happens next depends on earnings and fundamentals. Only a few companies survived the early 2000s with long-term outperformance.
Key Takeaway: Overpaying for momentum stocks often leads to regret. Discipline and diversification win long term.
Should You Just Invest in the S&P 500 in 2025?
It feels easy. It looks diversified. But nearly half of the S&P’s allocation is in just 20 companies. Long-term data shows broader diversification outperforms during market rotations.
Key Takeaways:
- S&P 500 is more concentrated than you think
- Broader indexes include small/mid cap exposure
- Diversified portfolios may lag short term but win long term
Who This Impacts: Index fund investors, skeptics of diversification, and long-term planners.
📅 What Now? Book a Complimentary Planning Meeting Whether you’re trying to optimize taxes, or prepare your retirement plan, our team is here to help.
Vance Wealth, LLC. (“Vance Wealth”) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where Vance Wealth and its representatives are properly licensed or exempt from licensure. The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.
The views expressed in this commentary are subject to change based on market and other conditions. This commentary may contain certain statements that may be deemed forward‐looking statements. Please note that any such statements are not guarantees of any future performance and actual results or developments may differ materially from those projected. Any projections, market outlooks, or estimates are based upon certain assumptions and should not be construed as indicative of actual events that will occur.
Index returns are unmanaged and do not reflect the deduction of any fees or expenses. Index returns reflect all items of income, gain and loss and the reinvestment of dividends and other income. You cannot invest directly in an Index.
No investment strategy or risk management technique can guarantee returns or eliminate risk in any market environment. All investments include a risk of loss that clients should be prepared to bear. The principal risks of Vance Wealth strategies are disclosed in the publicly available Form ADV Part 2A.
Risk associated with equity investing include stock values which may fluctuate in response to the activities of individual companies and general market and economic conditions. Although bonds generally present less short-term risk and volatility risk than stocks, bonds contain interest rate risks; the risk of issuer default; issuer credit risk; liquidity risk; and inflation risk. Investing in foreign domiciled securities may involve risk of capital loss from unfavorable fluctuation in currency values, withholding taxes, from differences in generally accepted accounting principles or from economic or political instability in other nations.