Market Update: Challenging Times, But Isn’t It Always?
June 18, 2025
By Peter R. Phillips, CFA®, CAIA®
Senior Vice President and Chief Investment Officer
Washington Trust Wealth Management
Over the past 35+ years as an investment professional, I have likely used the words ‘challenging’ or ‘uncertain’ when describing the then current year investment environment. 2025 is no different.
Global tariff and trade policy; U.S. fiscal and tax policy (and credit rating downgrade); heightened political divide and social unrest; and multiple major armed conflicts, including the recent break out of hostilities between Israel and Iran, are just a few of the current ‘challenging’ and ‘uncertain’ issues facing investors.
It is hard to say which year over the past 35+ has been the most ‘challenging’ or ‘uncertain’ – or even rank the top five. It is probably more important to recognize that challenges and uncertainties have been, and always will be, present for investors; and that a challenging environment is not without opportunity.
Indeed, opportunity exists today. Opportunity for favorable trade deals and peaceful resolution to current geopolitical conflicts. Longer-term, opportunity related to the development of artificial intelligence (AI) technologies that hold promise for significant advances across of wide swath of industries, including healthcare.
As such, we remain cautiously optimistic about the path forward, especially over the long term. The economy remains in growth mode (albeit slowing from the post-COVID recovery pace of the last few years), inflation continues to moderate, and the overall outlook for corporate earnings remains positive. We will provide more details and analysis of the U.S. economy and financial markets in our upcoming 3Q: 2025 Economic and Financial Market Outlook to be published in July.
In the meantime, I encourage you to reach out to your investment team if you should have any questions or concerns about the current market environment and your portfolio.
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