Please see below, an article from M&G Wealth, analysing the key factors currently affecting global investment markets. Received – 08/08/2025
Market review
Equity markets put in a strong performance, while government bond yields rose during a week where sentiment was generally positive. Technology stocks have continued to drive this buoyant move in markets, with the “Magnificent 7” reaching new all-time highs. Momentum was supported by strong earnings, particularly in the US and Europe, while hopes have risen for imminent rate cuts in the US, as macroeconomic data has softened and Federal Reserve speakers have communicated more openness in lowering the deposit rate. This comes after Non-Farm Payroll Data showed worrying signs for the labour market; with bond investors reacting to price in a 97% chance of a rate cut at the next meeting – up from 40% before the data release.
Federal Reserve Governor Kugler’s resignation has created an opportunity for US President Donald Trump to appoint a new board member, who could potentially be groomed as a successor to Chair Jerome Powell or at least represent another dovish voter. Trump has since nominated Stephen Miran for the position on a temporary basis, an economic advisor who recently co-authored a plan for reforming the Fed. Trump has been especially vocal about his desire for the Fed to lower rates more quickly and it appears he is looking to find ways of appointing people to the Fed who are on that same wavelength.
The deadline for trade deals with the US has now passed, yet nations continue to be in negotiations to lower the tariffs imposed upon them. Switzerland have had little luck so far in trying to strike a deal and are set to continue incurring 39% tariffs, while India have been threatened with a substantial tariff increase should they continue to purchase oil from Russia. Pressure from the West has been building on nations to distance themselves from the Russians, as war continues to rage on with the Ukraine. Tariff focus is now also centred on pharmaceuticals and semi-conductors, with 100% tariffs on these sectors being touted. However, there was some positive news for investors as some mega-cap companies like Apple and Taiwan Semiconductor Manufacturing Company (TSMC), who are building manufacturing capabilities in the US, would be exempt.
Outlook
While trade tensions continue to simmer in the background, markets appear to be taking comfort in resilient earnings and signs that trade negotiation may be prevailing over escalation. The coming weeks will be key in assessing whether this optimism is justified. Data driven central banks continue to be in focus, with potential divergences in monetary policy occurring as inflationary forces, labour markets and growth come under the spotlight.
Movers table:
| Equities | 1 Week | YTD | 1 Year |
| S&P 500 | 1.64% | 8.61% | 20.78% |
| FTSE 100 | 0.67% | 14.18% | 15.93% |
| Euro Stoxx 50 | 3.26% | 11.17% | 16.97% |
| MSCI Asia Pacific ex Japan | 2.67% | 17.95% | 24.22% |
| MSCI China | 2.74% | 24.99% | 46.34% |
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Marcus Blenkinsop
12th August 2025