Index
Markets
August 2025 confirmed the positive momentum in global equity markets, with new record highs in the United States and substantial gains in Asia, while progress in Europe was more modest.
In the United States, the S&P 500 advanced 1.9%, the Dow Jones outperformed with a gain of 3.2%, and the Nasdaq Composite added 1.6%, restrained by profit-taking in large-cap technology stocks following previous strong gains.
In Europe, the Eurostoxx 50 closed up 0.6%, the German DAX declined 0.7%, and the Swiss SMI rose 3.0%, supported by the rebound of large caps such as Nestlé and Novartis.
In Asia, the Nikkei 225 reached new highs with a 4.0% gain, while China’s CSI 300 surged 10.3%, fueled by domestic capital inflows and government support measures, with technology and artificial intelligence among the main performance drivers.
Gold ended the month at USD 3,447.95 per ounce (+4.8% in August, +32.4% year-to-date), supported by geopolitical tensions, persistent inflation concerns, and rising expectations of Federal Reserve rate cuts.
On the currency front, the US dollar weakened further: EUR/USD rose 2.4% to 1.169 (+13.2% year-to-date), while USD/CHF fell 1.5% to 0.801, with the Swiss franc still benefiting from its safe-haven status.
Among cryptocurrencies, Bitcoin gained 8.3% to USD 116,491 (+17.1% year-to-date). Ethereum posted a far more significant increase (+49.2%), climbing to USD 3,734, driven by renewed interest in decentralized finance applications built on its network.
Despite the equity rally, the backdrop remains fragile. The Trump administration confirmed 15% tariffs on European cars and extended tariff measures to Asian partners, rekindling fears of renewed protectionism and raising risks for European manufacturing, which is particularly exposed to a deterioration in global trade.
Economy
At its late-July meeting, the Federal Reserve maintained rates in the 4.25–4.50% range, confirming a cautious, data-dependent approach. At the Jackson Hole symposium in late August, Chair Powell reiterated that a first rate cut could come as early as September, provided inflation and labor market conditions allow it, thereby reinforcing expectations of monetary easing by year-end. At the same time, President Trump increased pressure on the central bank: beyond calling for immediate cuts, he openly criticized Governor Lisa Cook, raising concerns about the Fed’s independence and adding to market uncertainty.
In Europe, the European Central Bank left its deposit rate unchanged at 2.00% at the end of July, marking a pause following the easing cycle that began in 2024. President Lagarde emphasized that future decisions will remain dependent on inflation and growth data, adopting a cautious “meeting-by-meeting” stance. With inflation nearing target and the first signs of stabilization in the economic cycle, analysts remain divided: some expect an additional cut by year-end, while others believe the easing cycle may already be complete. Rising trade tensions with the United States remain a key risk to the policy outlook.
Geopolitics
In the Middle East, the crisis further escalated in August. Israel intensified its offensive in Gaza City, declaring it a combat zone and revoking humanitarian pauses. Raids and urban clashes worsened the humanitarian situation, with a sharp rise in civilian casualties. At the same time, a targeted operation in Yemen struck Houthi leadership, heightening tensions with Iran and adding to regional instability.
On the Ukrainian front, August marked a potential diplomatic shift. On August 15, Donald Trump met Vladimir Putin in Alaska: no formal agreement was reached, but the Kremlin referred to an “understanding,” while Trump deferred decisions to President Zelensky. Shortly after, an extraordinary summit was held at the White House with Zelensky and leading European officials, who reaffirmed support for Kyiv and revived the idea of NATO-style security guarantees. France, Germany, Italy, and the EU stressed that any negotiations must directly involve the Ukrainian president.
On the ground, however, the conflict remains far from resolution. In August, more than 600 Russian drones and missiles struck Kyiv, causing dozens of casualties, including children, and damaging European diplomatic missions as well as the British Council. Ukraine retaliated with strikes on Russian refineries and energy infrastructure. The situation remains precarious: while high-level diplomatic contacts suggest attempts at de-escalation, the war continues to cause devastating effects and keeps Europe at the forefront of support for Kyiv.
Conclusions
In August, we maintained our portfolio allocation unchanged, confirming our overweight position in equities and our geographical preference for Europe over the United States. Our stance on gold remained neutral with a slight overweight bias, consistent with the strategy of previous months. On the bond side, we modestly increased duration—still below benchmark levels—given the uncertainty surrounding US monetary policy and geopolitical risks that could trigger renewed inflationary pressures.
We expect volatility to remain elevated in the coming weeks, driven by trade tensions. During the month, the Trump administration raised tariffs on Indian products to 50% in retaliation for Russian oil imports and applied the same measure to Brazil, targeting the agri-food sector. These moves have reignited fears of broad-based protectionism, with potential repercussions on global value chains and inflation. Combined with the escalation in the Middle East and the ongoing war in Ukraine, these factors underscore the importance of a flexible and disciplined management approach, ready to adjust asset allocation swiftly in response to unexpected developments
Allocation
Liquidity
Bonds
Equity
Precious metals & Commodities
Geo-tactical allocation
Switzerland
Western Europe ex Switzerland
North America
Latin America
Asia Pacific
Top sectors
- Information Technology
- Financials
- Industrials
Market data (data as of 29.08.2025)
Event calendar
Legend
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CPI: Consumer Price Index GDP: Gross Domestic Product FOMC: Federal Open Market Commitee BOJ: Bank of Japan |
FED: Federal Reserve System EIB: European Investment Bank BOE: Bank of England SNB: Swiss National Bank |
ZEW: Zentrum für Europeische Wirtschaftsforschung (Center for European Economic Research) YoY: Year on Year MoM: Month on Month |
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