Weekly Market Review - 18-08-2025
- Anthony Walters
- Aug 18
- 4 min read
Updated: Aug 19
Global markets continue to balance optimism around potential US interest rate cuts with lingering pressures from tariffs and slowing growth. While equities touched record highs, volatility crept back in toward the week’s end, and investors are watching closely for signals from the Federal Reserve’s Jackson Hole meeting. Elsewhere, economic resilience in the UK, shifting commodity prices, and new developments in ESG and geopolitics shaped sentiment.
Market Recap.
Equity markets reached new all-time highs last week, buoyed by optimism surrounding US interest rate cuts. However, momentum softened slightly heading into Friday’s close.
The Dow Jones Industrial Average ETF led gains with a 1.19% rise whilst the FTSE 100 ETF followed with a 0.50% increase. Meanwhile, the S&P 500 ETF dipped 0.04%, and the Nasdaq 100 ETF declined 0.74%, reflecting a brief rotation away from growth stocks.
News.
Britain's economy slowed less than expected between April and June after a strong start to the year, despite the shock of US trade tariffs and a weaker jobs market, offering help to finance minister Rachel Reeves in meeting her budget goals.
Official figures published on Thursday showed that after an unusually strong 0.70% expansion in the first three months of 2025, gross domestic product grew 0.30% in the second quarter. That was above the 0.10% forecast by the Bank of England and a Reuters poll of economists.
Inflation.
Consumer prices in the US held steady at a 2.70% annual rate in July, showing tariffs are feeding into some goods but not broadening further. Producer prices – a measure of business costs – jumped 3.30%, the sharpest increase in five months. Inflation at the consumer level remains manageable, but rising costs for businesses could squeeze margins and eventually pass through to households.
Central Banks.
Federal Reserve Chair Jerome Powell will give a speech on the economic outlook and the Fed's review of its policy framework next Friday at the Kansas City Fed's annual central banking conference in Jackson Hole, Wyoming.
Powell's speech comes as data showing some impact of tariffs on inflation, but the job market is also slowing, a combination fuelling expectations for the Fed to cut interest rates by a quarter of a percent when it meets next month. US President Donald Trump wants lower rates and is looking for a replacement for Powell, whose term ends in May 2026.
Commodities.
Soybeans gained over 3.00% last week as the USDA’s August report cut US soybean production to 4.292 billion bushels—about 2.00% below trade estimates—reflecting lower planted area despite improved yields.
Steel fell by over 2.80%, hitting its lowest level in a month after reports that the Trump administration expanded its 50% tariff on steel and aluminium imports to cover hundreds of additional products. President Trump also said he would announce further tariff measures on steel and semiconductor chips in the coming weeks.
ESG.
Swiss generic and biosimilar medicine pharmaceutical company Sandoz announced that it has signed a new 10-year virtual Power Purchase Agreement (PPA) with Elawan Energy for new-build solar projects in Spain, anticipated to cover the vast majority of Sandoz’s electricity use in Europe.
Under the new partnership, Sandoz and Elawan Energy will jointly develop solar projects with a total installed capacity of 150 MW. Once operational, the initiative is expected to supply nearly 90% of the electricity demand for Sandoz’s European operations, which account for the majority of the company’s global footprint.
Geopolitics.
Russia would relinquish tiny pockets of occupied Ukraine and Kyiv would cede swathes of its eastern land which Moscow has been unable to capture, under peace proposals discussed by Russia's Vladimir Putin and Donald Trump at their Alaska summit, sources briefed on Moscow's thinking said.
The account emerged the day after Trump and Putin met at an airforce base in Alaska, the first encounter between a US president and the Kremlin chief since before the start of the Ukraine conflict.
Week Ahead.
US: The Fed’s Jackson Hole symposium dominates the week, with Powell’s Friday speech the main event.
UK: Inflation is projected to rise to 3.70%, the highest since January 2024, while retail sales are expected to post a second consecutive monthly gain (+0.60%).
Europe: Services growth is forecast to slow, while manufacturing remains in contraction.
View this week's ESG in 5 for more updates here
Author.
Sources.
Market recap Data sourced from FE FundInfo & Koyfin. ETFs quoted: iShares Core FTSE 100 UCITS ETF, iShares Core S&P 500 UCITS ETF, iShares Nasdaq 100 UCITS ETF (quoted in Pounds Sterling).
News Trump envoy to visit Moscow this week before deadline for ending Ukraine war, by Shaun Walker, The Guardian, 04/08/2025
Inflation Euro zone inflation holds at ECB target, supporting case for steady rates, by Balazs Koranyi, Yahoo finance/Reuters, 01/08/2025
Central Banks Fed holds interest rates steady despite Trump pressure, By Natalie Sherman, BBC News, 30/07/2025
ESG Helion Breaks Ground on First Fusion Power Plant to Supply Energy to Microsoft, by Emanuela Hawker, ESG Today, 01/08/25
Geopolitics Swiss eye 'more attractive' offer for Trump after tariff shock, By Nathalie OLOF-ORS, Yahoo Finance/AFP, 04/08/2025
Commodities Tradingeconomics.com, 30/06/25
Week ahead Nathan Sweeney, Marlborough, 07/07/2025
