Global News Summary : 25-29 August 2025
Markets at a Crossroads:
Global markets finished August with a mix of resilience and fragility. U.S. GDP was revised up to 3.3% annualized in Q2, a sharp rebound from Q1’s contraction, largely due to stronger domestic demand. Core PCE inflation accelerated to 2.9% year-on-year in July, a five-month high, fueling ongoing Fed policy debates as investors look to September macro data. Equity indices slipped from recent highs, with tech especially soft, while bond yields climbed on both sides of the Atlantic. AI remained the primary engine of capital flows, though semiconductors were pressured by U.S.-China friction. The September labor report and CPI will set Fed expectations.
Equities & Growth
US: S&P 500 fell about 0.6%; Nasdaq -1.2%; Dow dipped 0.3%; Russell 2000 softened. The “Magnificent 7” declined as tech and semis underperformed. Upward Q2 GDP revision to 3.3% was driven by stronger investment growth and resilient consumer spending
Europe: An EU trade framework with Washington added stability, but French market jitters rose after the government lost a key confidence vote, spiking yields and pulling equities lower.
UK: Governor Andrew Bailey noted challenges due to weak labor participation. Long gilt yields surged to their highest in decades, breaching 5.64%.
Japan: Ministry of Finance requested ¥32.4 trillion in new debt funding for 2026; Tokyo CPI eased to 2.5%.
China: Property sector woes deepened as new-home sales by top 100 developers slumped 24% YoY in July.
Jobs & Labor
US: Fed Governor Waller stated that a "jumbo" (50 bps) cut could be justified if August payrolls show substantial weakness; September 5 payrolls are the focus.
UK: Think tanks foresee unemployment climbing toward 5% amid stagnation.
Debt & Yields
US Treasuries: 2Y ~3.62%, 10Y ~4.23%, 30Y near 4.9% as yields rose with inflation risk.
UK Gilts: 30-year gilt at roughly 5.64%, highest since the late 1990s.
French bonds: 10-year spread widened on political turmoil.
German Bunds: Around 2.72%; stable relative to periphery.
Inflation
US: Headline PCE up 0.2% MoM, core PCE up 0.3%, and 2.9% YoY—highest since February—confirming stubborn underlying inflation.
UK: Grocery inflation near 4%; house prices rose 3.7% YoY.
Canada: CPI eased to 1.7% YoY.
Japan: Tokyo CPI further eased to 2.5% YoY.
Artificial Intelligence (AI) & Tech
Meta announced a major partnership with Midjourney to bring generative AI to its ecosystem.
Crusoe Energy was in advanced talks to raise capital at a ~$10bn valuation, while Dell boosted its AI server guidance sharply.
Google announced a $9bn Virginia data center infrastructure commitment
Macro Risks & Themes
U.S.: Economic activity is robust, but sticky inflation and trade tensions risk slowing demand.
UK: Rate hikes and rising inflation weigh on consumers and borrowers.
Europe: France's snap confidence vote led to higher volatility and bond spreads.
China: The housing crisis and sluggish PMI suppress overall growth.
Forward-Looking Preview — September
Key focuses for early September:
US Payrolls (Sep 5): Consensus is +100k jobs, with unemployment seen rising toward 4.4%. Weaker data could revive larger cut talk.
CPI (Sep 11): Street sees ~2.6–2.8% YoY headline; sticky services could surprise.
FOMC (Sep 16–17): Fed expected to cut by 25bps, but credibility and political pressures loom.
Europe: France's political challenges (Sep 8 confidence vote) could drive spread risk. ECB monitoring trade fallout.
China: Investors watch for additional stimulus and PMI data.
AI earnings: Nvidia, Dell, and hyperscalers are bellwethers as tariff and export headwinds build.
Bottom Line
August closed with caution: higher yields, spiking volatility around European politics, and persistent inflation risks. Economic momentum and tech investment remain strong, but investors should brace for September volatility—viewing dips in defensives and quality AI infrastructure as selective entry opportunities