June 2025 Market Outlook
May 2025 presented a resilient yet complex global economic landscape. Major economies continued to face persistent inflationary pressures, particularly in services, leading central banks to maintain cautious, data-dependent stances on interest rates. Geopolitical factors continued to influence trade and commodity markets, adding a layer of uncertainty. Concerns over the potential inflationary effects of these tariffs have reignited fluctuations in expectations for US interest rates. Despite this, global growth remained robust, driven by strong consumer spending and a gradual recovery in manufacturing, as evidenced by improving S&P Global Purchasing Manager Indexes (PMI) which rose form slightly from slightly from 48.6 in April 2025 to 48.8 in May 2025. The S&P 500 posted a solid gain of 6.15%, while the NASDAQ outpaced it with an impressive return of 9.04%.
On May 13, the US and China held talks in Switzerland and reached a significant agreement to sharply reduce tariffs over the next 90 days. In a major breakthrough in the ongoing trade dispute, the US will lower tariffs on Chinese goods from a steep 145% to 30%, while China will reduce its tariffs on US imports from 125% to 10%. This marks the second major tariff agreement recently, following a similar deal with the UK. While certain UK products were exempted from US tariffs, most UK exports will still face a 10% duty. These developments signal a broader shift, suggesting that while future negotiations may bring concessions, some form of trade levies are likely to remain in place.
Just days before heading to Switzerland for tariff negotiations, China unveiled a sweeping stimulus package packed with financial incentives aimed at jumpstarting its economy. To spur consumer spending, policymakers reduced interest rates on mortgages and car loans, while also easing credit conditions for small businesses. In addition, the central bank cut the reserve requirement ratio for banks by 0.5 percentage points to unlocking roughly 1 trillion yuan (US$138 billion) in liquidity. On top of that, 1.1 trillion yuan (US$152 billion) was injected through relending programs to support sectors ranging from tech startups to elder care services.
Malaysia’s economy demonstrated commendable stability, propelled by resilient domestic consumption and a notable recovery in its export sector, especially electrical and electronics (E&E). A rebound in tourism further bolstered the services sector. Inflation remained manageable due to targeted government subsidies and Bank Negara Malaysia’s (BNM) proactive measures, with the Overnight Policy Rate (OPR) held stable. The Malaysian Ringgit experienced mild fluctuations, influenced by global sentiment and US monetary policy, but found support from strong fundamentals like a healthy current account surplus.
Across Asia, property markets showed varied but generally stabilizing performance. Major hubs like Singapore and Hong Kong saw renewed investor interest in prime commercial and luxury residential assets. In Malaysia, the property market remained notably resilient. The residential segment, particularly affordable housing, saw steady demand, supported by government initiatives and financing options. The industrial property sector (logistics, warehousing) continued to perform strongly, benefiting from e-commerce growth, supply chain diversification, and sustained foreign direct investment. Infrastructure projects like the Johor Bahru-Singapore Rapid Transit System (RTS), and Kuala Lumpur-Singapore High-Speed Rail (HSR), also boosted property values.
Looking ahead, the interplay of global monetary policy, geopolitical stability, and domestic reforms will shape market dynamics. Malaysia’s diversified economy and proactive policies position it well to navigate complexities and capitalize on opportunities, with investors advised to focus on strong fundamentals and long-term growth trends.
Successful investing involves staying focused on long-term trends while remaining agile enough to capitalize on short-term market fluctuations particularly during times of policy-driven uncertainty. Patience, discipline, and staying well-informed are key to successful investing. Rather than reacting hastily to market noise, investors who remain composed and focused on the long-term outlook are better equipped to benefit from the market’s trend.
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