Stay up to date with the latest market trends, economic shifts and key financial developments across the UK, US and Asia.
This week's headlines
📈 US economy swings back to growth – new estimates show GDP grew at an annual rate of 3.3% in Q2, a swift rebound from a 0.5% contraction in Q1. This was helped by stronger business investment and resilient consumer spending.
❌ Trump ‘fires’ Fed governor – Trump attempted (via social media) to remove Federal Reserve (Fed) Governor Lisa Cook over alleged fraudulent activity with her personal mortgage applications. For now, Cook remains in place as the issue is escalated to the courts.
🛢️ US raises India tariffs to 50% – tariffs on a range of Indian goods were increased from 25% to 50%, in response to India’s ongoing purchases of Russian oil.
⬇️ Nvidia earnings disappoint – the world’s most valuable company said sales are likely to slow to ‘just’ $54 billion in Q3. While in line with forecasts, it fell below sky-high expectations.
💹 Japanese confidence grows – Japan’s consumer confidence index hit its highest level since January thanks to households being more upbeat about their income, job prospects, and day-to-day finances.
What this means for financial advisers and clients
After repeated attacks on Fed Chairman Jerome Powell over a lack of interest rate cuts, Trump has now focused his attention on attempts to remove Govener Cook. While the legality of this effort is still being debated, what’s clear is that the Fed faces real threats to its independence.
Why does this matter? The Fed’s ability to set interest rates free from political pressure is central to its credibility. The more its independence is threatened, the less effective it can be and hence the less credibility it has in the market. This in turn could potentially increase the cost of US debt, if credit ratings agencies see it as less sustainable and investors demand a greater premium for purchase.
After Trump’s announcement about Governor Cook, short-term treasury yields fell and long-term yields rose, reflecting bets of lower interest rates in the short term but also expectations of higher long-term inflation. For now, these moves remain relatively minor as markets broadly retain confidence that independence has been preserved – but it’s a dynamic worth watching closely.
Chart of the week - the US isn't always a winner
Source: Charlie Bilello
Why this matters
US equities have enjoyed a strong run in recent years, driven by the boom in mega-tech stocks. The chart above serves as a reminder that the country isn’t always exceptional.
Over the last 30 years the US has moved through repeated patterns of under and overperformance against the rest of the world, and history suggests its current lead won’t last forever.
The first quarter of 2025 has underlined this point. As shown by the massive outperformance of the rest of the world, with the US still reeling from the impact of their own tariffs, the value of AI-spending being questioned, and European markets boosted by increased infrastructure and defence spending plans, this reverse of fortunes could be set to continue.
The lesson for investors is a familiar one: diversification remains key and the benefits of splitting assets by region are clear.
Market recap
UK tumble
UK markets fell this week, with declines led by sectors such as utilities and mining. Retail stocks were hit by consumer fears of a cooling job market and slowing growth.
US hits another all-time-high
The S&P 500 inched up to hit another all-time-high as US markets rose on the back of strong economic growth data, tech performance, and expectations of an interest rate cut in September.
Tech pressure in Asia
The Hang Seng fell on continued negative tariff outlook in China, falling consumer demand, and a drop in profits at mega-tech company Meituan. However, the Nikkei saw small gains, despite some tech weakness, ahead of key inflation and unemployment data out today.
Gains for oil and gold
Oil rose on waning expectations of an end to the war in Ukraine and increased likelihood of Russian supplies reaching the market. Gold prices also rose on the back of US interest rate cut expectations, which would increase the attractiveness of the precious metal.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | -1.08% | 16.00% |
| FTSE 250 | -1.42% | 8.17% |
| S&P 500 | 0.64% | 3.07% |
| NASDAQ | 1.76% | 3.32% |
| MSCI Europe ex UK | -1.71% | 16.38% |
| Hang Seng | -2.07% | 21.94% |
| Nikkei 225 | 0.82% | 5.11% |
| Brent Crude | 0.75% | -8.57% |
| Gold Spot | 1.16% | 30.12% |
| UK 10yr Gilt yield | -2bps | -1bps |
| US 10yr Treasury yield | -11bps | -35bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 28th August 2025.
Stay tuned for next week’s market insights
For more market updates sign up to our CPD-accredited Let's Talk Markets webinars.
This article is for financial professionals only. Any information contained within is of a general nature and should not be construed as a form of personal recommendation or financial advice. Nor is the information to be considered an offer or solicitation to deal in any financial instrument or to engage in any investment service or activity. Parmenion accepts no duty of care or liability for loss arising from any person acting, or refraining from acting, as a result of any information contained within this article. All investment carries risk. The value of investments, and the income from them, can go down as well as up and investors may get back less than they put in. Past performance is not a reliable indicator of future returns.
