Weekly market commentary

Market review

As Q2 earnings season draws to a close, headlines have once again turned to geopolitics. In an effort to deliver on his promise to end the Russia/Ukraine conflict, President Trump held concurrent meetings with President Putin in Alaksa and then with President Zelensky in The White House. Whilst details remain sparce, the optics alone have stirred speculation about a potential turning point in the war, with the Russian President now proposing a meeting with Zelensky in Moscow. 

Global central bankers, policymakers, and economists gathered in Idaho as the 2025 Jackson Hole symposium got underway. Hosted annually by the Federal Reserve Bank of Kansas City, the event serves as a key forum for discussing long-term economic and monetary policy issues. Though global in scope, the three-day event is typically headlined by remarks from the Chair of the Federal Reserve, which often provide important insight into the US monetary policy outlook. 

In the leadup to Jackson Hole, investors appeared to take a more cautious stance, rotating out of technology stocks and reducing levels of risk. The Nasdaq Index, which is heavily weighted towards US “mega-cap” technology companies, fell nearly 2% intraday on Wednesday, with other global technology companies following suit. This shift has followed a run of strong performance and may reflect profit taking ahead of potential policy signals from central banks. 

UK inflation surprised to the upside this week, with headline, core, and service inflation measures all coming in above expectations. The upward pressure was largely driven by transport costs, particularly air fares. These figures complicate the Bank of England’s policy outlook, especially following stronger-than-expected Gross Domestic Product (GDP) but softer labour market data. Elsewhere, the Eurozone continues to show relative macro stability, with inflation data coming in unchanged and in line with the European Central Bank’s 2% target, reinforcing the region’s reputation for resilience during periods of global uncertainty. US jobless claims however, rose above expectations as the US labour market continues to show signs of softening.

Outlook

Markets remain reactive to a mix of economic and geopolitical signals, with recent moves reflecting uncertainty around inflation, growth, and policy direction. While corporate earnings have held up in many regions, investor sentiment has become more cautious. As inflation trends diverge and labour markets evolve, central banks may take increasingly different paths—raising the potential for greater dispersion across asset classes and regions in the period ahead.

Movers table