Weekly Market Update (Aug 31, 2025)

Market Hedwig
Aug 31, 2025
2 min read

HIGHLIGHTS

Markets are performing well, supported by the favorable earnings and increasing rate cut expectations. Global equities are looking for new drivers after reaching record highs. Eyes on labor market data in the coming week.

Fed: Fed signalled a likely rate cut from September. The high US rates were dragging down the rate-sensitive markets, like the housing market. It is also one of the major barriers against a further increase in global risk assets.

Asia: Japan’s inflation remains firm and sticky. The Governor of Japan expects sustained wage growth, and it is more likely to have a rate hike in October. In China, exports are still solid amid tariffs and it is likely to have presidential meeting by end of the year.

Data: The data calendar in the coming week is heavy. The 2025 Fed pricing is stable this week, supported by the combination of upward revision of Q2 GDP and in-line core PCE data.

MARKETS

Nasdaq	21,455.55	-0.19%
S&P 500	6,460.26	-0.10%
Dow	45,544.88	-0.19%
10-Year	4.23%	-3bps
Brent	67.48	+1.06%
DXY	97.86	+0.13%

*Data as of market close. 5-day change ending on Friday.

VIEW FROM THE STREET

Equity

UBS: The outlook of large tech equities is still compelling. Q2 earnings have been robust and the forward guidance also held up. Although the valuations are higher but the sentiment does not appear overly bullish.

Morgan Stanley: Markets are showing confidence in economic growth as the cyclicals are significantly outperforming more defensive stocks, combined with the heat around GenAI theme and capex boom, supported by the recent tax bill.

Fixed Income

Barclays: Although there are abrupt changes to the policy environment and global economic outlook, the overall financial markets did not react to that. Only the long-end bond yields reflected the concerns about the long-term consequences.

Goldman Sachs: Despite the front-end of the yield curves being relatively stable, the risk premium at the long-end has increased. As a result, the curve is steeper than what the fundamental supported.

Economy

UBS: A weakening job market and economic data could provide scope to resume easing. GDP growth in US remains gloomy, and as the job market data cools, we believe the downward pressure in employment would be the key factor in Fed deliberations.

Morgan Stanley: There are concerns about deficits and debt in US, and the supply of long-duration debt also increasing. US Treasury may issue debt more on the front-end of the curve, where Fed rate cut could lower interest costs.

KNOWLEDGE TRANSFER

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DISCLOSURE

This newsletter is meant for informational purposes only and is not investment advice. Always consult a licensed investment professional before making important investment decisions. Advertising and sponsorship do not influence editorial content or decisions. Market Hedwig is not responsible for the promises made or the quality or reliability of the products or services offered in any advertisement.