MARKET UPDATE AUGUST
The S&P 500 index is near record highs, buoyed by strong earnings, robust sector breadth, and anticipation of Federal Reserve rate cuts.
Volatility is unusually low—with the VIX index falling over 70% since April—suggesting market complacency. However, we may experience more turbulence ahead, especially as fall often brings heightened volatility.
Key Points
Broad Rally: Materials, consumer discretionary, and financials are outperforming Big Tech, signaling broader market participation. The S&P 500 Equal Weight index has gained notably.
Continued Leadership by Tech: Despite some slowdown, AI-driven Big Tech—like NVIDIA and Microsoft—still wields outsized influence.
Economic Data: Mixed labor metrics, rising core inflation, and geopolitical pressure on the Fed (especially from political leadership) are key uncertainty drivers.
Fed Expectations: Markets currently price in ~85–95% odds of a Fed rate cut in September.
Risk of Overheating: If the S&P 500 climbs toward 7,500 (a ~19% rally), it may enter bubble territory akin to the dot-com era.
Optimistic Catalysts: sustained rate cuts could unlock further gains, supported by stronger monetary growth, weaker dollar, falling bond yields, and improving consumer confidence.
Broader Outlook: Analysts see ongoing opportunities beyond tech—particularly in financials, industrials, healthcare, small-caps, and international equities—as markets diversify.
Key Factors That Could Shape the Market
– Markets are highly sensitive to September’s rate decision. A cut could sustain the rally; a hold or overly dovish tone could shake sentiment.
– Upcoming jobs reports (e.g., on September 5) and inflation numbers will be critical. Weak jobs or persistent inflation could sway the Fed and market expectations.
– Broader participation (beyond tech) is a healthy sign. Continued rotation into cyclicals, small-cap, and defensive sectors may support stability.
– Strong corporate earnings have been a tailwind. Watch for signs of deceleration.
– Political pressures on Fed officials may undermine Federal Reserve independence and could spark volatility.
– Elevated valuation, especially in the Magnificent Seven, would limit the potential gain the market can make.
Our portfolio has added 4.03% gain in August, thanks to contribution of $ETH and a broad price increase of other different holdings. Our year-to-date return has achieved 24.72% by 31.08.2025, which outperformed the S&P500. I will keep managing the portfolio according to a balanced strategy and actively cut down the risk if the situation is further elevated.
-- Thanks for reading---... Show More
We use our own and third-party cookies on our websites to enhance your experience, analyze traffic, and for security and marketing. For more info, see our Cookie Policy or go to Manage Settings.
Privacy Preference Center
When you visit any website, it may store or retrieve information on your browser, mostly in the form of cookies. This information might be about you, your preferences or your device and is mostly used to make the site work as you expect it to. The information does not usually directly identify you, but it can give you a more personalized web experience. Because we respect your right to privacy, you can choose not to allow some types of cookies. Click on the different category headings to find out more and change our default settings. However, blocking some types of cookies may impact your experience of the site and the services we are able to offer.
More information
Manage Consent Preferences
Strictly Necessary Cookies
Always Active
These cookies are necessary for the website to function and cannot be switched off in our systems. They are usually only set in response to actions made by you which amount to a request for services, such as setting your privacy preferences, logging in or filling in forms. You can set your browser to block or alert you about these cookies, but some parts of the site will not then work. These cookies do not store any personally identifiable information.
Performance Cookies
These cookies allow us to count visits and traffic sources so we can measure and improve the performance of our site. They help us to know which pages are the most and least popular and see how visitors move around the site. All information these cookies collect is aggregated and therefore anonymous. If you do not allow these cookies we will not know when you have visited our site, and will not be able to monitor its performance.
Functional Cookies
These cookies enable the website to provide enhanced functionality and personalisation. They may be set by us or by third party providers whose services we have added to our pages. If you do not allow these cookies then some or all of these services may not function properly.
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.
Cookie List
label
ConsentLeg.Interest
label
label
label
Sun Nov 09 2025 03:55:33 GMT+0000 (Coordinated Universal Time)
