InvestMacro

On Thursday, US stock indices continued to rise. The Dow Jones (US30) climbed by 0.16%, the S&P 500 (US500) gained 0.32% to reach a new record high above 6,500, and the tech-heavy Nasdaq (US100) finished up 0.53%. Market sentiment was supported by strong economic data and sustained enthusiasm for artificial intelligence, despite mixed signals from Nvidia’s latest earnings report. The chipmaker reported a 56% surge in quarterly revenue but excluded potential China sales from its expectations, causing its stock to dip slightly even as analysts raised price targets and affirmed confidence in AI-driven growth. Other tech firms, including Broadcom, Micron, Microsoft, Meta, and Amazon, saw gains, highlighting the sector’s momentum. In the broader economy, US Q2 GDP was revised upward to 3.3% on an annualized basis, and jobless claims came in lower than expected, which eased recession concerns.

European stocks closed mixed on Thursday as markets digested key US tech sector earnings and the global rate outlook. The German DAX (DE40) fell by 0.03%, while the French CAC 40 (FR40) rose by 0.24% and the Spanish IBEX35 (ES35) gained 0.34%. The UK FTSE 100 (UK100) closed down 0.42%. The minutes from the ECB’s July meeting revealed a split among policymakers regarding the inflation outlook. Some argued that near-term risks were tilted to the downside, citing a weaker growth outlook and the impact of US tariffs. Others warned that risks could still be to the upside, particularly in the long term, given uncertainty about energy prices and currency movements. While inflation is at the target, officials noted it’s partly driven by temporary factors that could shift, underscoring the ongoing debate over whether the ECB should be cautious or vigilant in its policy.

WTI crude oil prices rose by 0.7% and reached $64.6 per barrel on Thursday, reversing earlier losses. The fading prospect of a peace deal between Russia and Ukraine lowered expectations for additional Russian supplies to enter global markets. Hopes for an easing of export restrictions on Moscow’s crude were further diminished as traders awaited a potential signal for tighter sanctions from President Trump. At the same time, Ukraine intensified its drone strikes on Russian oil infrastructure, disrupting exports and adding to the uncertainty.

Asian markets were mostly up on Thursday. Japan’s Nikkei 225 (JP225) rose by 0.73%, while China’s FTSE China A50 (CHA50) gained 1.02%. Hong Kong’s Hang Seng (HK50) dropped 0.81%, and Australia’s ASX 200 (AU200) closed with a positive result of 0.22%.

Tokyo’s core consumer prices in August 2025 came in at 2.5% year-on-year, marking the third consecutive month of decline and meeting market expectations. Although inflation has slowed, it remains above the Bank of Japan’s 2% target, which supports speculation about another rate hike later this year. Governor Kazuo Ueda recently noted that further wage growth is expected amid a tightening labor market, reinforcing the view that conditions for additional tightening are gradually forming. At its July meeting, the Bank of Japan left interest rates unchanged but raised its inflation expectations and struck a more optimistic tone on the economy.

The Australian dollar climbed to $0.654 USD on Friday, marking its fourth straight session of gains and reaching a two-week high, while the US dollar remained under pressure. The AUD also found support from stronger-than-expected domestic inflation, which eased market bets on a near-term rate cut by the Reserve Bank of Australia (RBA). Still, the Central Bank’s August meeting minutes indicated that further cash rate cuts are likely within the next year, with the pace and timing dependent on upcoming data and global risks. Investors are now looking ahead to the upcoming manufacturing PMI to get new insights into the country’s economic momentum.

In New Zealand, two-year-ahead consumer inflation expectations eased from 5.1% to 4.8%, while house price expectations held at 3.5%. Despite this, declining real interest rates and a dovish RBNZ stance are providing some support, although consumer sentiment and retail spending may remain subdued in the near term.

On Wednesday, stock indices recovered from early losses and advanced. The Dow Jones Index (US30) rose by 0.32%. The S&P 500 Index (US500) gained 0.24%. The tech-heavy Nasdaq Index (US100) closed up by 0.17%. The S&P 500 (US500) set a new record, and the Nasdaq (US100) hit a weekly high. The strengthening of software company stocks drove the overall market higher.

On Wednesday, Nvidia reported better-than-expected second-quarter results, but data center sales revenue was slightly below expectations, as US restrictions on H20 chip sales to China had a negative impact. Following the report’s release, NVIDIA shares dropped by about 3.1% in aftermarket trading.

European stock markets mostly declined on Wednesday. Germany’s DAX (DE40) fell by 0.44%, France’s CAC 40 (FR40) closed up by 0.44%, Spain’s IBEX35 (ES35) fell by 0.65%, and the UK’s FTSE 100 (UK100) dropped by 0.11%. Investors continued to monitor the heightened political uncertainty in France ahead of a confidence vote on September 8. Domestically in Germany, the GfK Consumer Climate Indicator fell to 23.6 in September 2025 from a slightly revised negative 21.7 in August, missing the expectations of a negative 22.0 and marking the weakest reading since April. The decline reflects households’ growing concerns about potential job cuts and persistent inflation. On the corporate front, Commerzbank (-2.5%), Deutsche Bank (-2.3%), and Siemens Energy (-1.6%) suffered sharp losses. Conversely, automaker stocks traded higher, led by Porsche (+2.4%), Mercedes-Benz (+1%), and BMW (+0.9%).

The Swiss Investor Sentiment Index fell by 56.2 points month-over-month to 53.8 in August 2025, signaling a return to pessimism after a brief positive reading of 2.4 in July. This is the weakest reading since November 2022, primarily due to the US imposing a 39% tariff on Swiss exports in early August. The US accounts for about 17% of Switzerland’s total exports, making it the country’s largest export market. Analysts expect Swiss export dynamics to weaken in the next six months.

WTI oil prices rose to $64.1 per barrel on Wednesday, recovering from a 2.4% fall on Tuesday, after US government data pointed to a larger-than-expected reduction in inventories. Crude oil inventories shrank by 2.39 million barrels to 418.3 million, which was more than the market anticipated, while stocks at the key Cushing hub decreased by 838,000 barrels.

Asian markets were mostly down on Tuesday. Japan’s Nikkei 225 (JP225) rose by 0.30%, China’s FTSE China A50 (CHA50) fell by 1.97%, Hong Kong’s Hang Seng (HK50) was down by 1.27%, and Australia’s ASX 200 (AU200) showed a positive result of 0.28%.

The Hang Seng Index fell by 1.27% on Wednesday, reversing earlier gains and marking a second day of losses amid a sell-off across all sectors. Sentiment worsened after several Chinese brokerage firms and fund managers reportedly restricted financing and purchases amid growing risks associated with the recent sharp rise in mainland stocks. Trading volume on Chinese exchanges on Tuesday exceeded 3.1 trillion yuan, the second-highest record.

The Australian dollar rose above the $0.650 mark on Thursday, extending its rally for a third consecutive session, supported by easing bets on another interest rate cut by the Reserve Bank of Australia. Market prices now imply only about 34 basis points of additional easing by the end of 2025, and the probability of a September move has decreased to roughly 25%, after July’s inflation came in higher than expected.

On Friday, the Dow Jones (US30) surged by 1.89% (+1.49% for the week). The S&P 500 (US500) gained 1.52% (+0.34% for the week), and the tech-heavy Nasdaq (US100) closed 1.54% higher (down -0.56% for the week). The US stocks skyrocketed on Friday after Fed Chair Jerome Powell’s speech at Jackson Hole signaled a potential September rate cut, triggering the strongest cross-asset rally since April. Speaking at the annual Fed symposium, Powell noted that a shift in the balance of risks to the economy “could call for an adjustment to our policy,” while also warning that inflationary pressures persist. Traders quickly raised the odds of a 25 bps rate cut in September to around 91%. Tech stocks performed particularly well, with Tesla jumping 6.2%, Meta, Alphabet, and Amazon all gaining more than 2%, and Nvidia up 1.7%. Intel shares soared 5.5% on reports that the Trump administration plans to acquire a 10% stake in the chipmaker.

The Canadian dollar strengthened to 1.39 per US dollar as weakness in the greenback outweighed poor domestic data. In Canada, the mood also turned more dovish for the Bank of Canada, as July retail sales were projected to have fallen 0.8%, the second-steepest decline in a year, highlighting the volatility in retail sales amid trade uncertainty with the US. Core average inflation held steady at 3.0% against expectations of 3.1%, and employment data showed an unexpected loss of 41,000 jobs in July versus expectations for a gain of 13,500. This kept the unemployment rate at 6.9%, reinforcing the case for a looser policy.

The Mexican peso strengthened to approximately 18.6 per US dollar, nearing its yearly high, driven by the weaker US dollar. Jerome Powell’s Jackson Hole speech increased the likelihood of a September Fed rate cut, which pushed the US dollar lower. This eased pressure on the dollar as a whole and supported emerging market currencies. At the same time, Banxico’s quarter-point rate cut to 7.75% on August 15 was a split decision, and the minutes omitted previous language promising further easing. This signals a gradual approach to easing rather than an aggressive pivot, maintaining a positive real yield.

European stock markets traded without a clear direction on Friday. The German DAX (DE40) rose by 0.29% (+0.20% for the week), the French CAC 40 (FR40) closed positive 0.40% (+0.51% for the week), the Spanish IBEX 35 (ES35) gained 0.61% (+0.81% for the week), and the British FTSE 100 (UK100) closed 0.13% higher (+2.00% for the week). Germany’s economy shrank by 0.3% quarter-on-quarter from April to June, a steeper contraction than the previous estimate of 0.1% and following a 0.3% growth in the first quarter.

WTI crude oil prices hit $63 a barrel on Friday, marking their first weekly gain in three weeks as geopolitical tensions and supply dynamics kept markets volatile. Uncertainty increased after Russia launched new airstrikes on Ukraine and Ukraine struck a refinery and a key oil pumping station, disrupting supplies on the “Druzhba” pipeline. Meanwhile, US crude oil stockpiles shrank by 6 million barrels last week, significantly more than expected, suggesting high demand and providing support for prices.

Silver soared to $39 per ounce, nearing its 14-year high of $39.5 reached in late July, amid the prospect of a Fed rate cut. Markets also assessed demand for silver’s industrial use. On the industrial front, new data showed that China’s solar panel exports surged more than 70% in the first half of the year, driven by rising demand for photovoltaics in India. This follows China installing over 93 gigawatts of solar panels in May, a 300% increase from a year earlier and a new record high.

Asian markets were mostly higher last week. Japan’s Nikkei 225 (JP225) fell by 1.89%, while China’s FTSE China A50 (CHA50) climbed 3.03%, Hong Kong’s Hang Seng (HK50) gained 0.18%, and Australia’s ASX 200 (AU200) ended the week up 0.32%.

Singapore’s annual inflation rate slowed to 0.6% in July 2025 from 0.8% in the previous month, slightly below market expectations of 0.7%. On a monthly basis, consumer prices fell by 0.4%, the sharpest decline in six months, compared to a 0.1% drop in the prior period. Meanwhile, the annual core inflation rate in July fell to a four-month low of 0.5%, missing market estimates and a 0.6% gain in the previous month.