2025 Midyear Market Outlook: Investing in a Post‑Globalization World

According to Eric Veiel, CFA®, Head of Global Investments and Chief Investment Officer at T. Rowe Price, this investment outlook highlights that 2025 has brought unexpectedly rapid changes driven by trade policy shifts and deglobalization, particularly between the U.S. and China. This process is reconfiguring global markets with significant implications for investors.

Key market implications include equity markets becoming less concentrated as the "Magnificent Seven" tech stocks' dominance diminishes, creating opportunities for broader market leadership including non-U.S. stocks. In bond markets, German fiscal expansion combined with U.S. tariff policies has triggered higher inflation expectations and sovereign bond yields, though corporate bond quality has improved.

T. Rowe Price's investment strategy response focuses on inflation protection through real assets like real estate and commodities, favoring value over growth stocks, and maintaining a modest preference for non-U.S. equities. The authors emphasize that this deglobalized environment will create different investment opportunities requiring adaptive strategies, heightened vigilance, and willingness to abandon previous assumptions as policy clarity emerges.

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