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The week in the markets - July 25, 2025

New trade deals were overshadowed by meme stock revival

 

  • U.S. and Japan struck a tariff agreement, lifting global markets to new highs.
  • Alphabet gave AI enthusiasts what they wanted, but Tesla threw cold water on Magnificent Seven performance.
  • Opendoor led a full-blown meme mania resurgence, as options volume broke records.

The week kicked off with a global rally, as a U.S.–Japan trade agreement reset the tone. Tariffs on Japanese imports, including autos, were slashed to 15%, softening pressure ahead of the looming August 1 deadline. The move not only caught markets off guard but triggered an increase in cyclical stocks, especially autos. Toyota jumped by double digits, the Topix (Tokyo Stock Price Index) logged a 3.6% gain, and Europe’s Stoxx 600 index got a lift on speculation the E.U. might not be far behind. U.S. stocks hit new highs once again, with the S&P 500 and Nasdaq climbing into record territory.

The AI arms race marched on, as Alphabet (Google’s parent company) delivered exactly what investors needed: strong earnings, strong AI demand and a capital expenditure bomb. The company plans to spend an additional $10 billion on AI infrastructure (making a total commitment of US$85 billion), which instantly buoyed the likes of Nvidia and Broadcom. Despite some initial hesitation in the stock, the message was clear: the AI cycle is alive and well. This reassurance was enough to offset weak results from Tesla, which saw its revenues fall more than any time in the past decade. Elon Musk’s warning about tougher times ahead and subsidy rollbacks didn’t help, pushing shares down 6%. However, the market in general shrugged it off. The broader takeaway is that the AI capital cycle remains the main driver and for now, it’s pushing the winners higher, even when the fundamentals get messy elsewhere.

Meme stocks are back and they brought friends. Opendoor went full 2021 this week, climbing over 40% in a single session on massive volume. On Monday, nearly 10% of all trading on U.S. exchanges was in this one stock. But the real fire was in the options market, where over two million call contracts changed hands, a number that is nothing short of crazy (call options are contracts to exchange a specific stock asset at an agreed price). The retail investor crowd (individual investors, as opposed to institutional investors) was everywhere, buying up penny stocks (shares of small companies) and chasing sharp moves like it was GameStop all over again (this was when individual investors banded together to drive up GameStop’s value). American Eagle surged double digits off a celebrity marketing campaign, and almost 20 stocks valued below a dollar outpaced Nvidia in volume. Whether this is the start of something bigger or just a summer fling remains to be seen, but it’s clear: retail appetite for risk is alive and well, and Gamestop-type situations are back on the menu.

This week, we’ve seen momentum from earnings, surprise trade breakthroughs and AI capital spending overwhelm political noise and soft macro data. With nearly 40% of S&P 500 companies yet to report their earnings, markets appear optimistic. And meme madness is just adding to the fuel.

Listen to our latest podcast for further insights.

This week's market closing value - week ending July 25, 2025

(As of 4:00 PM ET.*)

EQUITY INDICESLevelChangeWTDYTD1-year5-year
   CADCADCADCAD
S&P/TSX27,510.89188.100.69%11.25%21.69%11.45%
S&P 5006,392.83101.421.46%3.57%17.38%15.23%
DJIA44,901.92560.071.11%0.57%11.47%11.63%
NASDAQ21,108.32212.660.86%4.16%21.80%15.79%
FTSE 1009,120.31128.191.46%14.21%15.50%9.83%
CAC 407,834.5811.911.05%14.75%13.25%10.22%
DAX24,217.50-72.010.60%31.50%42.08%14.19%
SXXP549.952.951.44%17.12%16.08%9.04%
Nikkei41,456.231,637.124.75%5.46%13.16%6.00%
Hang Seng25,388.35562.692.09%19.36%47.18%0.72%
CURRENCY
RETURNS
CADChangeWTDYTD1-year5-year
US$1.3706-0.0021-0.15%-4.71%-0.86%0.43%
Euro1.60960.01430.90%8.10%7.36%0.58%
Yen0.00930.00010.62%1.49%3.37%-5.98%
CANADIAN TREASURIESYieldChangeCOMMODITIESUSDChange
3-month2.670.01Oil$65.15-$2.20
5-year3.08-0.03Gold$3,337.86-$10.42
10-year3.52-0.06Natural Gas$3.10-$0.49
CANADIAN PRIME RATE
4.95%
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