Market update: 5 August 2025
Global markets ended the week on a softer note as disappointing US jobs data and geopolitical tensions weighed on sentiment. In the US, job growth slowed in July with 73,000 new jobs added compared to expectations of 100,000, while the unemployment rate nudged up to 4.2%. That’s led markets to believe the Federal Reserve is now more likely to cut rates in September. Volatility also picked up, reminding investors that markets don’t always move in straight lines.
Here in Australia, the ASX 200 closed just slightly lower (-0.1%) despite some encouraging news on inflation. Quarterly CPI came in softer than expected, with headline inflation slowing to 2.1% year-on-year and core inflation easing to 2.7%. That’s strengthened the case for the RBA to cut rates at next week’s meeting on 12 August. Looking ahead, all eyes will be on the start of the August earnings season, which will give investors a clearer picture of how businesses are faring in the current environment.
In the US, the S&P 500, Nasdaq and Dow Jones all saw losses of around 2.2–2.9% as investors digested the weaker jobs numbers and ongoing trade developments. Recent tariff changes have pushed the US effective tariff rate to around 15%, adding to uncertainty. European markets also finished lower, with autos and miners leading declines following new US tariffs on copper imports, while US economic data added to the cautious mood.
In Asia, early gains in Greater China gave way to losses after the latest round of US-China trade talks didn’t deliver a breakthrough. A meeting of China’s top policymakers promised more economic support but lacked details, which left investors looking for clarity. In Japan, markets also eased as some investors took profits after recent gains and focused on local corporate earnings instead.
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