Monthly Market Review - May 2025
May 2025 was characterized by a rebound in global markets, primarily driven by easing trade tensions between the U.S. and China. Global equities, as measured by the MSCI World Islamic Index gained 7.5%, bringing its year-to-date (YTD) return to 4.3%, whereas the Dow Jones Sukuk Index remained flat in May, with its year-to-date (YTD) return steady at 3.0%*. Gold prices remained elevated throughout May but ended the month roughly unchanged from April’s close, as investors continued to seek safety amid ongoing geopolitical uncertainty. Meanwhile, markets digested Moody’s downgrade of the U.S. credit rating and reacted to the newly introduced tax bill. 1
In the U.S., economic indicators suggested improving conditions. The Manufacturing PMI rose notably to 52.3, indicating a return to expansion driven by renewed confidence amid easing trade tensions*. April’s CPI came in at 2.3% year-over-year, marking a slight decline from the previous month and pointing to easing inflationary pressures*. The Federal Reserve, aligning with market expectations, kept interest rates unchanged in May and reiterated its data-dependent approach. The unemployment
rate remained stable at 4.2%, underscoring a resilient Labor market, while GDP forecasts remained cautiously optimistic following the previous quarter's contraction*. Additionally, the U.S. House of Representatives passed a sweeping tax reform package aimed at extending tax cuts. The bill is
expected to boost business investment and consumer spending in the near term, however it might also lead to higher government deficits. 2
The UK economy continued facing headwinds, with manufacturing activity further contracting as the Manufacturing PMI declined slightly to 45.1 from April’s 45.4*. Amid these mixed signals, the Bank of England implemented a 25-basis-point rate cut, lowering the Bank Rate to 4.25% to stimulate growth and support the economy amidst persistent inflation and subdued economic activity. 3
In the Eurozone, inflation held steady at 2.2% in April, unchanged from March *. The Manufacturing PMI edged up to 49.4, signaling a slower pace of contraction and a modest improvement in business sentiment*. With inflation gradually easing and growth remaining fragile, markets widely expect the ECB cut rates again at its June meeting. Uncertainty around global trade, particularly following recent U.S. tariff announcements, continues to cloud the economic outlook. 4
China’s manufacturing sector showed signs of stabilization in May, with the official Manufacturing PMI rising to 49.5 from April’s 49.0*. Domestically, the Chinese government reinforced its commitment to supporting the private sector by implementing the recently passed Private Sector Promotion Law, aimed at boosting confidence and stimulating economic activity. 5
The U.S. and China agreed to a temporary pause on escalating tariffs, but tensions persist amid disputes over rare-earth exports and
accusations of non-compliance. 6
Looking ahead, global markets are expected to remain sensitive to developments in trade negotiations, central bank policies, and geopolitical events. Investors are encouraged to maintain a diversified portfolio to manage potential volatility.
Referrences:
1 (Reuters, Moody's cuts America's pristine credit rating, citing rising debt, 2025.)
2 (Bloomberg, 2025)
3 (Reuters, Bank of England cuts rates to 4.25% as it sees tariff hit to growth, 2025)
4 (Morningstar, 2025)
5 (Reuters, China adopts law to bolster private sector amid trade war, 2025) * From Bloomberg - Economic Indicators
6 (nypost, 2025)
Risk Warning: Equity investments are not readily realisable and involve risks, including loss of capital, illiquidity, lack of dividends and dilution, and it should be done only as part of a diversified portfolio. Investments of this type are only for investors who understand these risks. You will only be able to invest in the company once you have met our conditions for becoming a registered member.
Please visit www.wahed.com/uk/ventures/risk for our full risk warning.
Risk Warning: As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
Please visit www.wahed.com for our full terms and conditions
Maydan Capital Limited, trading as WahedX, is registered in England and Wales (Company No. 13451691), registered office: 87-89 Baker Street, London, W1U 6RJ, UK. Maydan Capital Ltd (FRN: 963613) is an appointed representative of Wahed Invest Ltd (FRN: 833225), an authorised and regulated firm by the Financial Conduct Authority.Wahed Invest Ltd. is registered in England and Wales (Company No. 10829012), registered office: 87-89 Baker Street, London, W1U 6RJ, UK and is authorised and regulated by the Financial Conduct Authority: FRN 833225.
Subscribe For More Islamic Finance Content
As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
Wahed Invest LLC (Wahed) is a US Securities and Exchange Commission (SEC) registered investment advisor. Wahed Invest provides brokerage services to its clients through its brokerage partner Apex Clearing Corporation, a member of NYSE - FINRA - SIPC and regulated by the SEC and the Commodity Futures Trading Commission. Registration does not imply a certain level of skill or training. Wahed does not intend to offer or solicit anyone to buy or sell securities in jurisdictions where Wahed is not registered or a region where an investment practice like this would be contrary to the laws or regulations. Any returns generated in the past do not guarantee future returns. All securities involve some risk and may result in loss. Any performance displayed in the advertisements or graphics on this site are for illustrative performances only.
Disclaimer: Wahed Technologies Sdn Bhd ("Wahed") is a Digital Investment Manager (DIM) licensee issued by Securities Commission Malaysia (eCMSL/ A0359/2019). It is part of Wahed Inc. Wahed is authorized to conduct a fund management business that incorporates innovative technologies into automated portfolio management services offered to clients under a license issued pursuant to Schedule 2 of the Capital Markets Services Act 2007. All investments involve risks, including the possibility of losing the money you invest, and the track record does not guarantee future performance. The history of returns, expected returns, and probability projections is provided for informational and illustrative purposes, and may not reflect actual future performance. Wahed is not responsible for liability for your trading and investment decisions. It should not be assumed that the methods, techniques, or indicators presented in this product will be profitable, or will not result in losses. The previous results of any trading system published by Wahed, through the Website or otherwise, do not indicate future returns by that system, and do not indicate future returns that will be realized by you.
Wahed Invest Limited is regulated by ADGM’s Financial Services Regulatory Authority (“FSRA”) as an Islamic Financial Business with Financial Services Permission for Shari’a Compliant Regulated Activities of Managing Assets and Arranging Custody [Financial Permission No. 220065]. Our ADGM Registered No. is 000004971.
Wahed assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. Any strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. Furthermore, the information presented may not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance.
There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services and should seek advice from an independent advisor before acting on any information presented. Any links to third-party websites are provided strictly as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites nor do we endorse the content and information contained on those sites. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the third-party websites.
