The S&P Global IMI Risk Appetite Index rose from -13% in June to +12% in July, marking the first positive reading since January and signaling a return of risk appetite among equity investors.

• Equities are now the most favored asset class globally, followed by commodities and corporate credit, while sentiment toward sovereign debt has worsened.

• Investor optimism is strongest for EU and Asia ex-Japan equities, with the US outlook still lagging due to geopolitical risk concerns.
• Financials and tech are the most favored sectors, with industrials and communications also seeing improved sentiment; basic materials and healthcare returned to favor.

• Investor concerns over valuations and the political environment persist, but macroeconomic and fiscal drags have eased notably since earlier in the year.
• The US remains a top perceived source of geopolitical risk in 2025, second only to China.