Views that inflationary pressures will persist in US equities markets due to the impact of Trump policies remain entrenched, and the market environment continues to point to higher interest rates as unavoidable. This is a summary of market developments and key events in late August.
In the US and Japanese equity markets on 24 August, the Dow Jones Industrial Average extended its gains, rising $140 from the previous day to $53,417, while semiconductor-related stocks fell. Long-term interest rates declined, and lower crude oil futures prices also supported a rebound in equity purchases. Developments involving the US Treasury Secretary and movements in AI and semiconductor-related stocks affected the market as factors related to inflation concerns and interest-rate trends.
On 25 August, the Dow Jones Industrial Average ended higher for a third consecutive session, with lower crude oil prices and declining long-term interest rates encouraging equity purchases. Toward the end of the session, expectations for earnings from Nvidia and other companies, along with reduced uncertainty over the situation in Iran, were viewed as positive factors. Market attention focused on the earnings announcements scheduled for 26 August and developments at the Federal Reserve.
The PCE price index announced on 26 August rose 0.2% month on month, exceeding market expectations, while long-term interest rates rose amid mounting inflation concerns. There was a view that expectations for a Federal Reserve rate hike could resurface, leaving the equity market without a clear direction.
In China, the Shanghai Composite fell 23 points on 24 August, rebounded on 25 August and rose again on 26 August, as expectations for government economic measures and developments in US-China relations influenced the market. In Japan, the Nikkei 225 recorded a sharp decline on 24 August but rebounded on 26 August, following gains in US equities. Interest-rate trends and movements in AI and semiconductor-related stocks were key market drivers.