Global News Summary 4 to 8 August 2025

Written By Larry Lim

Global markets saw risk-on momentum as strong corporate earnings and Fed rate cut expectations drove the S&P 500 near 6,400 (+0.8%) and the Nasdaq 100 to record highs, while bond yields climbed (US 10Y 4.28%, Bund 2.69%, gilt 4.60%) amid $28B in US equity outflows and $107B into money markets.

Trade tensions persisted with Trump expanding tariffs on India, gold, and semiconductors, claiming “hundreds of billions” in revenue, though talks with China, Japan, and the EU hinted at selective relief. Economic data showed resilience in Australia (household spending +4.8% y/y), China (exports +7.2% y/y, services PMI 52.6), and Japan (wages +2.5% y/y), but UK construction slumped (PMI 44.3) despite a BOE rate cut to 4%.

AI investment surged with Meta’s $29B data center financing, TSMC’s 26% sales jump, and SoftBank’s $500B “Stargate” project, even as Tesla shut its Dojo team. Inflation concerns remained — US July core CPI expected to accelerate — while recession risks stayed muted but sensitive to tariffs, labor softness, and seasonal equity pullbacks.

  • United States

    • Markets: S&P 500 +0.8% to near 6,400; Nasdaq 100 at all-time high; Dow +0.5%.

    • Bonds: 10Y Treasury yield up to 4.28%, 2Y at 3.76%, 30Y at 4.85%.

    • Flows: $28B out of equities, $107B into money market funds (BofA/EPFR).

    • Policy: Trump announced/touted tariffs on India (+25% on imports over Russian oil), gold bars, and threatened 100% levies on semiconductors. Claimed tariffs have brought in “hundreds of billions” in extra revenue.

    • Trade: Possible US–China deal to extend truce; tariff relief discussions with Japan/EU ongoing; possible US–Russia ceasefire talks.

  • United Kingdom

    • BOE cut rates 25bps to 4%, but hawkish inflation forecasts cooled expectations for more cuts.

    • Construction PMI fell to 44.3 (housing slump).

    • 10Y gilt yield up to 4.60%.

  • Eurozone (Germany)

    • German factory orders fell 1% m/m vs. +1.1% expected.

    • 10Y Bund yield rose to 2.69%.

  • Japan

    • Nominal wages +2.5% y/y in June; civil servants to get 3.62% pay rise — biggest in 34 years.

    • Yen weakened to 147.75/USD; JGB auction saw weaker demand.

    • BOJ signaling potential year-end hike if US tariffs impact is manageable.

  • China

    • July exports +7.2% y/y, imports +4.1%, surplus $98.2B.

    • S&P services PMI at 52.6 (highest since May 2024).

  • Australia

    • July beef exports to US +12% y/y despite Trump’s tariffs.

    • Household spending +4.8% y/y in June (fastest since Jan 2024).

  • New Zealand

    • Unemployment rate 5.2% in Q2, less than feared, lifting NZD.

Economic Growth

  • Strong corporate earnings and expectations for Fed rate cuts lifted global equities.

  • Australia showing robust consumption growth; China’s trade surplus signals continued export resilience despite tariffs.

  • BofA sees a “Goldilocks” setup — steady growth, falling rates, rising asset prices.

Jobs

  • Japan wage hikes and NZ jobless data signal mixed labor dynamics in Asia.

  • US jobs data from prior week seen as “concerning” (Fed’s Cook), hinting at possible cooling.

  • Selective layoffs/AI team restructurings (e.g., Tesla’s Dojo) contrast with expansion in AI/data center hiring.

Debt Securities

  • Yields rose globally: US 10Y at 4.28%, Bund 2.69%, gilt 4.60%.

  • Bond weakness linked to stronger risk appetite and reduced safe-haven demand.

  • Japan’s 10Y auction saw lower bid-to-cover ratios.

Artificial Intelligence (AI)

  • OpenAI in talks for $500B valuation share sale; released first open model since ChatGPT launch; rolled out GPT-5.

  • SoftBank advancing $500B “Stargate” AI project with OpenAI/Oracle; acquired Foxconn’s Ohio EV plant.

  • Meta secured $29B financing (PIMCO & Blue Owl) for Louisiana data center.

  • TSMC July sales +26% y/y on AI chip demand.

  • Tesla disbanded Dojo supercomputer team.

  • AI applied to biotech — Chai Discovery raised $70M at $550M valuation.

ESG

  • No major new policies, but large-scale AI/data center and semiconductor investment trends point to domestic industrial capacity building (Meta, SoftBank, Apple).

  • Consumer weakness evident in Under Armour and Sweetgreen guidance despite ESG marketing.

Inflation

  • US: TD Securities sees July core CPI showing renewed upward momentum; Fed’s Musalem says inflation mandate unmet.

  • UK: BOE inflation forecast revision reduced chances of further easing.

  • Japan: Wage gains feed into BOJ’s price stability targets.

Recession

  • Consensus sees low immediate risk, but potential headwinds from tariffs, geopolitics, and labor market softness.

  • Seasonal pullback in equities (Aug–Sep) considered healthy consolidation.

  • BofA risk indicators show improved sentiment but warn of vulnerability to macro shocks.

Larry Lim
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Global News Summary: 28 July - 1 Aug 2025