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
📈 Tariffs hit post-war highs – President Trump has followed through on his threats, lifting the average US tariff rate to over 15% - the highest level since World War II and far beyond the 2.3% average seen last year.
✂️ Split decision to cut UK rates – The Bank of England (BoE) cut interest rates to 4% after the first-ever double vote in history was needed to break the tie.
➡️ Fed leadership takes shape – Fed Governor Christopher Waller, who opposed last week’s decision to hold rates, is seen as the frontrunner for Fed chair – signalling openness to earlier rate cuts.
🔥 AI fuels US tech earnings– Hot on the heels of Microsoft and Meta, Palantir delivered blockbuster results this week, driven by AI demand.
🤚 Dollar dips on Fed Governor appointment – US President Trump has chosen his Council of Economic Advisers Chairman Stephen Miran to temporarily serve as a Federal Reserve Governor. Miran has previously criticized the Fed, blaming policy errors on groupthink.
What this means for financial advisers and clients
The tariffs are here – and with them, it may be time to retire the ‘Trump Always Chickens Out’ (TACO) acronym. In its place? TADA – Trump Actually Delivers Anguish.
India, one of the nation's hardest hit as punishment for continuing to buy Russian oil, could lose as much as 1% of GDP as a result of the 50% tariff on goods.
While the UK looks to have come out favourably with only a 10% baseline tariff, the general tariff environment has created enough uncertainty to lead to division at the BoE as to whether economic weakness outweighs inflationary concerns. The market reacted positively to the measured considerations - the pound strengthened, even alongside the cut in interest rates.
In contrast, the dollar fell this week over concerns that political appointees at the Fed could damage central bank independence. As a consequence, the returns from the positivity in US tech markets have been dampened for UK investors by the currency movements.
Chart of the week - trade levels rise between emerging markets
Source: RBC, GAM
Why this matters
This chart highlights a clear trend - trade between emerging market nations is growing, indicating a lower reliance on trade with developed nations than before.
For investors, this shift matters. It shows that emerging markets are increasingly able to chart their own path – creating fresh opportunities and potential diversification benefits when combined with developed market exposure.
Market recap
UK markets steady
UK lenders rose this week after a less severe than feared motor finance ruling. Nasdaq sets new record: The US tech index hit new heights this week, with Microsoft surpassing a $4trn valuation.
European strength
Continental equities are set for their best week in three months, with pharmaceutical giant Novo Nordisk spiking higher after disappointing drug trial results from US competitor Eli Lilly.
Exports drive Hang Seng
Hong Kong stocks delivered growth momentum off the back of strong Chinese economic data, with exports increasing 7.2% from last year.
Gold bars barred
Tariffs on gold bars have wobbled gold markets, with US premiums spiking higher.
| | Weekly Change | YtD Change |
|---|---|---|
| FTSE 100 | 0.56% | 14.06% |
| FTSE 250 | 1.14% | 8.73% |
| S&P 500 | 0.57% | 1.26% |
| NASDAQ | 1.67% | 4.32% |
| MSCI Europe ex UK | 1.76% | 15.05% |
| Hang Seng | 1.13% | 18.43% |
| Nikkei 225 | -0.05% | 3.24% |
| Brent Crude | -5.74% | -17.44% |
| Gold Spot | -0.19% | 21.46% |
| UK 10yr Gilt yield | +4bps | -1bps |
| US 10yr Treasury yield | +2bps | -33bps |
Source: FE FundInfo, goldprice.org, exchangerates.org.uk, investing.com and finance.yahoo.com. GBP returns as at close of business on Thursday 7th August 2025.
Stay tuned for next week’s market insights
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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.
