Economic data and more company earnings from the likes of AI-darling Nvidia (NVDA) were the focus for investors in August in an eventful end to the summer.
The month kicked off with a much weaker than expected US jobs report. Data from US Bureau of Labor Statistics (BLS) showed that the US economy added 73,000 non-farm payrolls in July, which was much less than the 104,000 expected by economists. In addition, the BLS said that downward revisions to the May and June jobs reports were “larger than normal”, while rate of unemployment also ticked higher to 4.2% from 4.1% the month prior.
Hours after the release of the data, US president Donald Trump moved to fire BLS commissioner Erika McEntarfer. The president then nominated conservative economist EJ Antoni to head up the labour data agency.
Tariffs also remained in the spotlight, with Trump imposing an additional 25% levy on imports from India, partly due to the country's purchases of Russian oil. Trump hiked this tariff rate to 50% later in the month.
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This comes as the US tries to limit the revenues Russia makes from its oil exports, having also imposed sanctions on Moscow over the war in Ukraine.
Trump and Russian president Vladimir Putin met in Alaska in mid-August to discuss the war, though progress on peace efforts since then appears to have stalled.
Meanwhile, the annual central bank symposium at Jackson Hole was among the major events in investors' calendars. In a speech at the symposium, US Federal Reserve chair Jerome Powell opened the door to a September rate cut, saying that that “the baseline outlook and the shifting balance of risks may warrant adjusting our policy stance”.
The US central bank was also in focus in late August as Trump attempted to fire Fed governor Lisa Cook, alleging she had committed mortgage fraud.
In terms of company earnings, Nvidia's second quarter earnings didn't quite manage to match investors' lofty expectations, despite the chipmaker beating estimates on the top and bottom lines. A week prior to Nvidia's earnings, a report by the Massachusetts Institute of Technology's Nanda initiative said that “95% of organisations are getting zero return” from their investments in generative AI, spooked investors.
Despite a range of information for investors to digest, JPMorgan Asset Management global market analyst Natasha May said that “August was a broadly positive month for markets“.
In terms of equities, she highlighted that the S&P 500 (^GSPC) gained 2% over the month, while the MSCI Europe ex-UK index rose 1.2% and the UK’s FTSE All-Share (^FTAS) advanced 0.9%, though it did underperform.
