Market uncertainty and volatility: an outlook for the remainder of 2025

As we approach the fourth quarter and the end of the year, predictability has become a scarce asset, and the only forecast on the horizon is that uncertainty and volatility will continue.

Mainly in the United States, “policy uncertainty is weighing on consumer sentiment, indicating a challenged outlook for the US economy,” the American investment management company Invesco notes in a mid-year investment outlook.

Financial firms J.P. Morgan and Goldman Sachs, as well as the asset management corporation BlackRock, also released their reports, and for them, this is one of the most defining features of the 2025 economic and financial landscape.

International trade

Another key point to follow until the end of the year will be the impact of international trade tariffs on the global economy. 

Since tariffs were implemented in August for some countries, while important partners are still negotiating an agreement (such as Canada, Mexico and China), analysts forecast a wave of tariff-related inflation on the rise.

“Even if the trade war is resolved relatively quickly, there likely will still be significant effects due to supply chain shocks and other disruptions,” says Invesco. But for Goldman Sachs, at least “the breadth of price rises” will be “narrower than observed in 2022.” 

Divided growth, weaker Dollar

Slow growth is emerging, particularly in the United States, as seen in certain indicators. J.P. Morgan points to the “still-tight labor market,” the “resilient wage growth,” and a “delayed fiscal stimulus.” 

Invesco expects a “slowdown in US growth over the coming quarters. However, strong overall household balance sheets should help limit the impact,” the company states.

In other economies, analysts emphasize that the domestic scenario will be key to economic growth. “The US pullback on the global stage creates challenges for surplus nations, but an increase in stimulus should counteract the worst effects. Overall, we anticipate non-US economies to see less of a growth hit from the trade war than the US,” Invesco says. 

Regional breakdown 

In Europe, financial institutions bet on fiscal stimulus from major economies (such as Germany) and interest rate cuts (seen in the EU and the UK, for example) as drivers. In terms of public companies, Goldman Sachs says that “Europe looks appealing, and many investment opportunities are emerging across sectors in the region.” 

In Japan, real wage growth can boost the economy, and in China, the relief may come from government support. “China, too, is engaging in greater fiscal spending, and there are signs of improvement in the property and consumer sectors,” Invesco analyses. 

And for Goldman Sachs, the country has good investment opportunities in advanced manufacturing, technology innovation and resilient consumption (with emphasis on premium products).  

Furthermore, the reports also project the further depreciation of the US dollar, “given its elevated level and the clear shift in drivers (with interest rate differentials taking a backseat),” according to J.P. Morgan’s analysis. 

“Foreign investors have been recycling surpluses into USD assets for well over a decade. That trend may be starting to reverse,” Invesco complements.

The pet industry against the tide 

For Garyth Stone, Managing Director at Houlihan Lokey’s Consumer Group, a prolonged downturn can be an opportunity for the pet market.

“When you have instability, investors focus on the most reliable investments. And pets are one of the most reliable areas, together with consumer health and wellness, because even in downturns, you still need to feed your pet; they still have to eat every day,” he explains.

With a strong demand, consumption is “more protected” – and investors know that, explains Stone. 

According to Andrea Binder, VP and Pet Industry Insights Leader at Nielsen IQ, the worst part of the hesitation regarding investments is passing, and the sector “will pick up back soon,” especially as consumer confidence gets better.