Market Quick Take – 27 August 2025

Market drivers and catalysts

Macro headlines

• In local state elections in Iowa, a seat formerly held by a Republican went to the Democratic candidate, who won by 10 points. This ended the Republicans’ super-majority in the state legislature and is a sign of rising opposition to Republicans and Donald Trump, as the district was formerly solidly Republican.
• The Federal Reserve stated that its governors can only be removed "for cause," ensuring its independence. This follows Trump's attempt to oust Governor Lisa Cook over alleged mortgage document falsification. The Fed said it would abide by any court decision in Cook’s legal challenge of her dismissal by Trump and has deferred any decision. The case could eventually head to the Supreme Court.
• The Dallas Fed's business activity index rose 4.8 points to 6.8 in August 2025, its highest since January. The revenue index increased to 8.6, while the employment index fell slightly to 1.2, indicating stable labour conditions. Business sentiment improved, with the outlook index turning positive at 4.3 for the first time in six months.
• The S&P CoreLogic Case-Shiller 20-City Home Price Index increased 2.1% year-on-year in June 2025, down from 2.8% in May and matching expectations. This marks the slowest growth since July 2023 due to high mortgage rates and ample housing inventory reducing buyer competition. 

Macro calendar highlights (times in GMT)

1430 – EIA's Weekly Crude and Fuel Stock Report
1700 – US Treasury to Auction 5-year Notes

Earnings events

Note: earnings announcement dates can change with little notice. Consult other sources to confirm earnings releases as they approach.

• Today: Nvidia , Crowdstrike, Snowflake
• Thursday: Dell, Marvell Technologies, Autodesk

For all macro, earnings, and dividend events check Saxo’s calendar.

Equities

USA
U.S. stocks rose as investors balanced Fed-independence worries with earnings optimism. The S&P 500 gained 0.4% and the Nasdaq 0.4%, while the Dow added 0.3%. Boeing jumped 3.5% after Korean Air signed a large multi-year aircraft order, lifting industrials, as Nvidia rose 1.1% ahead of results and Eli Lilly surged 5.9% on positive late-stage data for its oral weight-loss/diabetes pill. The backdrop was dominated by President Trump’s move to remove Fed Governor Lisa Cook, which Cook vowed to challenge, keeping policy risk in focus into Nvidia’s print.

Europe
European equities fell as French political risk accelerated. The Euro Stoxx 50 dropped 1.1% and the Stoxx 600 0.8%, with France’s CAC 40 down 1.7% after PM François Bayrou set a Sept. 8 confidence vote that opposition parties said they would oppose. Commerzbank fell 5.0% after a Bank of America downgrade, while Ørsted rebounded 5.8% following the prior session’s slump tied to U.S. offshore wind project setbacks. Focus stays on French political headlines and eurozone data into week-end.

Asia
Asia stocks were cautious into U.S. tech earnings and tariff headlines.  Hong Kong’s Hang Seng fell 1.2% to 25,524.92 after Trump warned of 200% tariffs if Beijing curbs rare-earth magnet exports; semis lagged in Hong Kong with SMIC −3%.

UK
FTSE 100 fell 0.6% as banks and rate-sensitives eased on global policy jitters tied to the Fed saga. SEGRO dropped 2.2% amid broad real-estate weakness, while Bunzl rose 5% after reaffirming guidance and resuming buybacks. London’s pullback followed a run of record highs, leaving focus on domestic data and BOE-speak later this week.

Digital Assets

Bitcoin closed at $111,843 (+1.5%) and Ether at $4,602 (+5.0%) at the 00:00 UTC cut. U.S. spot BTC ETFs recorded $88.1m net inflows, led by IBIT (+$45.3m) and FBTC (+$14.5m); ETH funds continued to see strong interest after sizable inflows.

Volatility

Spot VIX sits below the front future with the curve in contango, and skew remained contained; at the SPX close of 6,465.94, the VIX-based daily move is 64.2 points, or 1.0%.

Fixed Income

• US Treasury yields fell again yesterday with a US Treasury auction of 2-year treasury notes seeing solid demand and sending the benchmark 2-year yield to the very bottom of the recent range near 3.66%. The benchmark 10-year treasury yield also fell back after a brief climb yesterday, ending the day slightly lower near 4.26% after an intraday high above 4.30%. Today the US Treasury will auction USD 70 billion 5-year notes.

• The Germany-France 10-year yield spreads ended the day just below 78 basis points, the widest spread since mid-April, as German longer yields fell slightly while the French benchmark 10-year OAT, for example, ended the day almost unchanged at 3.50%.

• Japanese government yields remain pinned near the cycle- and multi-year highs.

Commodities

• Gold traded near USD 3,400 overnight before drifting as the dollar strengthened, with support driven by concerns over the Fed’s independence after Trump doubled down on his attempt to oust Lisa Cook. If successful, Trump would secure a majority on the Board of Governors, supporting his rate cutting agenda, despite ongoing concerns about sticky and currently rising inflation.

• Crude futures steadied following Tuesday’s slump after Trump imposed 50% tariffs on most US imports from India, making good on a threat to punish one of the world’s largest economies over its purchases of discounted Russian oil. However, these concerns continue to be offset by the risk of a growing supply glut amid rising OPEC+ production. Meanwhile, ahead of the EIA’s weekly update, the API reported a 1 mb decline in US stockpiles.

• Soybeans’ recent run of gains paused, partly because China, the world’s top soybean importer, doesn’t appear to have bought a single U.S. cargo just days before the start of the US export season. The next wave of supply from Brazil is not ready until February, so a potential trade deal between US and China may unleash a surge in demand, keeping prices supported for now.

Forex

• The US dollar firmed again late yesterday, keeping EURUSD closer to 1.1600 than to 1.1650, while USDJPY crept back toward 148.00 overnight, falling just short of that mark by late Asian trading overnight.

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