Global equities advanced sharply in Q2 2025 as volatility eased, policy risks moderated, and investor sentiment improved. U.S. stocks staged a broad-based rebound, with the S&P 500 gaining 10.9% for the quarter, reversing the weakness seen in Q1. Growth sectors led the rally, with large-cap technology posting notable gains; the Nasdaq-100 rose 17.9%. Information technology and communication services were the top-performing sectors, supported by solid earnings and sustained demand for digital infrastructure. In contrast, energy shares lagged as oil prices declined and sector earnings softened.

International equities also delivered strong results. The MSCI EAFE Index, which tracks developed markets outside the U.S. and Canada, rose 11.8%, supported by a weaker U.S. dollar, stabilizing manufacturing activity in Europe, and improving business confidence. The MSCI Emerging Markets Index gained 12.0%, benefiting from strength in select Asian markets alongside supportive fiscal and monetary policies in several countries. Currency stability and improving export demand also contributed to the positive results across a broad range of emerging economies.

Bond markets posted gains as credit spreads tightened and the Federal Reserve kept interest rates unchanged. The Bloomberg U.S. Aggregate Bond Index rose 1.2% during the quarter, supported by a modest decline in longer-term yields and steady demand for high-quality fixed income. High-yield bonds outperformed investment-grade debt, with the Bloomberg U.S. Corporate High Yield Index advancing 3.5%, reflecting strong investor appetite for income and limited near-term default risk. The 10-year U.S. Treasury yield ended the quarter at 4.2%, little changed from Q1, as easing inflation data offset concerns about slowing economic growth.

Commodities posted mixed performance. The Bloomberg Commodity Index declined 3.1%, driven by weakness in energy as crude oil prices fell 9.4% on softening global demand expectations and higher inventories. Precious metals continued to attract safe-haven flows, with gold rising 5.7% for the quarter. Agricultural prices were generally steady, supported by balanced global supply and demand conditions.

As of June 30, 2025, OCERS’ portfolio had a market value of $25.8 billion, up from $24.5 billion at the end of the first quarter. OCERS’ portfolio generated a quarterly return of 5.5% relative to the policy benchmark return of 5.6%.