Market update: 26 August 2025
Markets saw a generally positive week, with global equities edging higher. Investors also saw early signs of a rotation, with money flowing out of the big-name tech stocks and into more traditional and cyclical parts of the market.
In Australia, the ASX 200 gained 0.3% for the week and even hit an all-time high on Thursday. Reporting season has been lively, with some big names moving sharply on results. James Hardie dropped 33%, CSL fell 20%, and Guzman y Gomez (GYG) slid 15% after disappointing guidance; this shows how sensitive the market has been. Still, gains in consumer discretionary and financials helped keep the index in positive territory.
In the US, markets finished mixed: the Dow Jones rose 1.5%, the S&P 500 edged up 0.3%, while the Nasdaq slipped 0.6%. Fed Chair Powell’s speech struck a careful tone, acknowledging inflation risks but also leaving room for future rate cuts if the labour market weakens. Earnings season has mostly wrapped up with around 80% of companies beating profit expectations, although many flagged tariffs, wages and consumer spending as ongoing challenges. Weekly jobless claims also ticked up, adding to signs of a cooling labour market.
European markets were stronger, with the FTSE, Euro Stoxx 600 and Euro Stoxx 50 all in the green, helped by improving business activity. Inflation in the UK, however, rose to 3.8% in July, its highest in 18 months. Meanwhile in Asia, Greater China saw gains as retail investors drove the Shanghai Composite 3.5% higher and the Hang Seng up 0.3%. Japan lagged, with the Nikkei down 1.7% as concerns around AI growth led to a broader tech selloff.
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