August 7, 2025
Asian stocks opened the day in a mixed mood, dancing to the uncertain tunes of weak US services numbers and the Federal Reserve's tricky policy path. The Nikkei-225 index stayed flat, South Korean shares dipped, while Australian stocks managed to climb up. The broader MSCI Asia Pacific Index inched up by 0.2%. Meanwhile, the US dollar lost some ground, and Treasury bonds steadied after a recent drop. Eyes stay glued on China, especially after President Donald Trump said he is “getting very close to a deal” with Beijing. The S&P 500 in the US tried to touch record highs but then lost steam. Tech giant Advanced Micro Devices Inc. surprised everyone with a strong sales forecast but worried about getting into the crucial Chinese market. Super Micro Computer Inc. faced a fall after missing expected results. Investor nerves are visible as the market tries to guess the Fed’s next move. Recent weak jobs data had sparked hopes for rate cuts, but the latest service sector report shows a sluggish economy, with firms cutting jobs due to rising costs and low demand. This paints a picture of challenges faced by businesses from tariffs, cautious buyers, and political uncertainty. Chris Senyek from Wolfe Research said, “We expect further choppy trading to persist in the later stages of summer, especially as the path of interest-rate policy remains unknown and highly sensitive to incoming economic data.” Traders keep speculating when the Fed might cut rates, balancing stubborn inflation against weakening economic signals. Fawad Razaqzada from City Index and Forex.com warned the S&P 500 might see rough times ahead because stock prices are very high while the economy slows down. On the tariff front, President Trump plans to hike tariffs on countries buying energy from Russia, including China. He also announced new tariffs on Indian goods soon and said the US will soon reveal tariffs on semiconductors and pharmaceutical imports. In a last-minute move, Swiss President Karin Keller-Sutter flew to Washington to try to lower a steep 39% US tariff. Her visit aims to quickly start talks with US officials. Back home, the Reserve Bank of India is gearing up to announce its interest rate decision, with experts expecting possible rate cuts soon. Also, Trump told CNBC Treasury Secretary Scott Bessent doesn’t want to replace Jerome Powell as Fed chair. In short, markets are riding a rollercoaster, juggling tricky economic data, tariff twists, and hot talks about interest rates. What’s next? Investors watch with bated breath!
Tags: Asian stocks, Federal reserve, Us services data, Trade deals, Tariffs, Interest rates,
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