MARKET WRAPS

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Germany ifo business climate index; trading update for Sasol

Opening Call:

European stock futures were mixed after Asia stocks broadly rose. The dollar strengthened, Treasury yields were flat. Oil futures were flat while gold rose.

Equities:

European futures were mixed after Fed Chair Jerome Powell said a rate cut may be warranted, due to growing concern about a sluggish labor market. While falling short of a promise of a September rate cut, Powell's comments were seen as opening the door for one or more cuts this year, giving investors a fresh dash of optimism.

"Although we think that a September cut is not quite a done deal, the bar now seems sufficiently high for the data to surprise positively that we shift our longstanding on-hold call for the Fed to a base case for 25bp rate cuts at both the September and December meetings," analysts at BNP Paribas said.

Forex:

Fed Chair Powell's dovish speech likely gives more scope for a downward move in the dollar against the yen, Nomura's Global Markets Research team said.

Powell's remarks increased the likelihood of a Fed rate cut at its September meeting, the team says, adding USD will probably continue to weaken in the near term.

Bonds:

Powell delivered a "virtuoso performance" during his highly anticipated speech Friday at the Jackson Hole Economic Policy Symposium in Wyoming, said Michael Arone, chief investment strategist at State Street Investment Management.

Treasury yields returned to their lowest levels in more than a week, according to Dow Jones Market Data.

"The market is saying, 'We expect some rate cuts coming here between now and the end of the year,'" said Arone. "I wouldn't be surprised if we get three," with a cut of 25 basis points at each of the Fed's remaining three meetings in 2025, he added.

Energy:

Oil was flat amid supply disruption prospects.

White House trade adviser Peter Navarro recently said that he expected U.S. tariffs on India to double on Aug. 27 as a penalty for Russian-oil purchases, ANZ Research analysts said.

These worries have increased after President Trump renewed his threat to impose sanctions on Russia unless progress is made to reach a peace deal with Ukraine, the analysts added.

Metals:

Gold edged lower on a likely technical correction.

Gold price's gains may also be constrained by uncertainty about Fed rate cuts beyond September, analysts said.

"Powell also said that the U.S. central bank would proceed carefully, which means that even if the Fed cuts rates in September, there is no surety it will continue to cut in October and December," said Vasu Menon, managing director for investment strategy at OCBC.

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Iron ore futures rose as prices are likely supported by risk-on sentiment across markets due to signs of weaker supply, the ANZ Research team wrote.

Rising steel prices and tightening port inventories should support prices.

While the Chinese property market is stabilizing, meaningful growth in steel and iron ore demand is unlikely until there's an increase in new construction activity, they said, noting that China's steel industry will be relatively immune to U.S. trade tensions as other markets--including Europe and Asia--pick up the slack.

TODAY'S TOP HEADLINES

Trump's Pressure Campaign on the Fed Casts Shadow Over Jackson Hole Gathering

JACKSON HOLE, Wyo.-Central bankers debated artificial intelligence, demographics and interest rates during their annual conference here this weekend. But institutional survival became the unmistakable and pervasive undercurrent at what is normally a staid academic gathering.

On Friday, the first full day of the conference, President Trump escalated a brazen and relentless campaign to remake the Federal Reserve, when he said he was considering firing governor Lisa Cook over mortgage-fraud allegations made by a Trump administration housing official.

How a Historic Immigration Drop Is Changing the Job Market

Last week, Federal Reserve Chair Jerome Powell said the U.S. labor market has entered "a curious kind of balance." The demand for workers has cooled, yet the unemployment rate has held steady because the supply of labor has slowed abruptly.

Behind that slowing in the labor supply is a dramatic swing in immigration, from one of the biggest waves in U.S. history to almost none. Economists say that could have subtle but lasting consequences.

Hunting Russian Drones in a Prop Plane With Shotguns

This month, a beaten-up, Soviet-era propeller-driven plane taxied to a halt on a rural runway and two of Ukraine's top air aces clambered out, one carrying a rifle. The pair, clad in olive-drab flight suits, are part of a low-tech solution to the high-tech problem of Russian drones.

The 56-year-old pilot, who learned to fly as a hobby before the war, and the gunner, 38, a former auto mechanic who had never been in a plane before the invasion, are part of a squadron dedicated to knocking down the unmanned Russian attack and reconnaissance aircraft that are the bane of ground troops and civilians.

Pentagon Has Quietly Blocked Ukraine's Long-Range Missile Strikes on Russia

WASHINGTON-The Pentagon has for months been blocking Ukraine's use of long-range missiles to strike inside Russia, U.S. officials said, limiting Kyiv from employing a powerful weapon in its fight against Moscow's invasion.

A high-level Defense Department approval procedure, which hasn't been announced, has prevented Ukraine from firing any U.S.-made long-range Army Tactical Missile Systems, or Atacms, against targets in Russia since late spring, the officials said. On at least one occasion, Ukraine sought to use Atacms against a target on Russian territory but was rejected, two officials said.

AI's Big Leaps Are Slowing. That Could Be a Good Thing.

The advance of cutting-edge AI is showing signs of slowing. For many companies looking to harness the technology, that wouldn't be a terrible thing.

Excitement about AI reached feverish levels at the end of 2022 with the release of OpenAI's ChatGPT and has stayed red-hot since. A regular cadence of more impressive large language models from startups and big tech companies alike has kept the party going, lifting stocks-including shares of AI-chip giant Nvidia-to lofty heights.

Nvidia's Roller Coaster for China AI Chips Takes a New Turn

Nvidia is halting production of an artificial-intelligence chip it developed for China after the government in Beijing told companies not to buy it, the latest twist in the U.S.-China tech war centered on the $4 trillion chip designer.

Nvidia in recent days has told some partners to stop work related to making its H20 product, which was approved by the Trump administration for sale in China in exchange for 15% of the sales going to the U.S. government, people familiar with the matter said. The pause came after Chinese officials raised concerns about potential security risks in the chips.

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Expected Major Events for Monday

05:00/FIN: Jul PPI

06:00/NOR: Jul Credit Indicator C2

07:00/CZE: Aug Business cycle survey (consumer/business confidence)

07:00/SPN: Jul PPI

08:00/POL: Jul Retail Sales

08:00/ICE: Jul PPI

08:00/GER: Aug ifo Business Climate Index

09:00/MLT: Jul RPI

09:00/LUX: Jun Trade

12:00/POL: Jul Broad money M3

13:00/BEL: Aug Business Confidence Survey

23:01/UK: Jul Adzuna UK Job Market Report

23:01/UK: Aug Shop Price Monitor

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(END) Dow Jones Newswires

August 25, 2025 00:04 ET (04:04 GMT)

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