Trade Secrets

WTF Dailies August 29, 2025

US stock futures wavered below the flatline as Wall Street readied for new data on inflation following a record-breaking day for markets.

Sage Kakkat

28 Aug 2025 — 6 min read

US stock futures wavered below the flatline as Wall Street readied for new data on inflation following a record-breaking day for markets.
Now, Wall Street is bracing for fresh insight on the chance of a rate cut, with the July reading of the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) index, set to land Friday at 8:30 a.m. ET.
Bets that the Fed will cut rates at its September policy meeting have been soaring since Fed Chair Jerome Powell opened the door to such a move in his remarks in Jackson Hole, Wyo. Central bank officials, however, must balance signs of a weakening labor market with indications inflation remains stubborn, especially as Trump's tariffs kick in.
Asian stocks were a mixed bag on Friday, with Chinese shares extending their stellar performance through August and remaining at recent multi-year peaks, while Japan’s Nikkei 225 retreated on a swathe of negative economic readings.
Regional markets took some encouragement from a mildly positive overnight close on Wall Street, where the S&P 500 hit a record high.
Most Asian markets were sitting on gains through August, as the second-quarter earnings season delivered and as investors welcomed the prospect of lower U.S. interest rates.
Chinese markets, however, were by far the best performers in the region.
China’s Shanghai Shenzhen CSI 300 index rose 0.7% to a three-year high, while the Shanghai Composite index rose 0.4% and was just below a 10-year peak. Hong Kong’s Hang Seng index rose 0.7% and was close to a recent four-year high.
Mainland Chinese stocks vastly outperformed their regional peers in August, with the CSI 300 up 10.3% this month, while the Shanghai Composite was set for a 8.1% gain.
Chinese markets were encouraged by increasing efforts by Beijing to promote local chip production, while signs of continued softness in the economy ramped up bets that the government will dole out even more stimulus measures.
The Hang Seng lagged with a modest 1.6% gain in August, as a technology sell-down in the latter half of the month weighed.
Next week, Chinese purchasing managers index data for August is set to shed more light on the world’s second-largest economy, and could factor into expectations of more stimulus.
Japan’s Nikkei 225 index fell 0.4%, while the TOPIX index shed 0.5% on Friday. Both indexes were trading up around 4% to 5% in August, having hit a series of record highs earlier in the month.
But a swathe of negative economic readings on Friday weighed. Japanese industrial production shrank more than expected in July, while retail sales data for the month also underwhelmed.
Adding to uncertainty over the economy, Tokyo consumer price index data for August showed inflation in Japan’s capital eased as expected. But core inflation remained sticky and above the Bank of Japan’s 2% annual target, keeping bets on more interest rate hikes by the BOJ largely in play.
Among broader Asian markets, South Korea’s KOSPI fell 0.2% as mixed earnings from Nvidia and its peers kept investors cautious towards tech and artificial intelligence stocks. The KOSPI was also trading down 1.7% for August.
Australia’s ASX 200 fell 0.1% and was trading up 2.4% for August, having hit a series of record highs while also crossing the 9000 point level during the month.
Singapore’s Straits Times index rose 0.2%, while futures for India’s Nifty 50 index fell 0.1% after the index slid 0.9% on Thursday.
Indian shares were battered by the U.S. proceeding with its 50% trade tariffs on New Delhi.

Market Close

Stocks were broadly lower on Friday, with the technology-heavy Nasdaq underperforming the S&P 500 and Dow Jones. Nonetheless, overall, for the month of August the S&P 500 is up about 1.9%, its fourth positive month in a row. For the full year, the S&P 500 is up about 9.8%, while the Nasdaq is up about 11.1%.
Meanwhile, bond yields were steady, with the 10-year Treasury yield hovering around 4.2%. In our view, after a solid 30% rally from the April lows, stock markets may experience bouts of volatility in the months ahead, but investors could consider these pullbacks as opportunities, to diversify and add quality investments at better prices – especially as we head into a potential reacceleration in growth in 2026.
Personal consumption expenditure (PCE) inflation for the month of July came in line with expectations. Headline PCE inflation was 2.6% year-over-year, in line with last month, while core PCE inflation, excluding food and energy, was about 2.9%, higher than last month's 2.8% reading. Overall, goods inflation may continue to experience upward pressure, driven in large part by higher tariff rates, but we see these as a one-time move higher in prices which should stabilize over time.
In addition, services inflation, which makes up about 65% of the PCE inflation basket, may see some cooling in the months ahead. Finally, preliminary University of Michigan survey data for August showed that 5-to-10-year inflation expectations were around 3.5%, well below forecasts of 3.9%, another indication that inflation expectations remain well anchored.
Fed Chair Jerome Powell delivered his annual speech at the Jackson Hole symposium last Friday, and he signaled that the Fed is willing to shift its policy rate from the current levels of 4.25% to 4.5%. However, Powell was clear that the Fed remains in a tough position: Inflation is likely to rise in the months ahead, while the labor market has shown early signs of cooling.
The next critical datapoint to watch will be next Friday's U.S. nonfarm jobs report, with forecasts calling for 75,000 jobs added and a tick up in the unemployment rate to 4.3% from 4.2%.

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