Trade policy easing meets monetary policy uncertainty.

Our view on the markets and investment strategy in the August 2025 Market Compass.

Highlights Include:

Progress in US trade policy

Over the past month, U.S. President Trump has reached agreements in the tariff dispute with several key trading partners. Companies from the European Union (EU) and Japan will each face U.S. import tariffs of 15% going forward. Equity markets reacted with some restraint to the progress in tariff negotiations.

Big Tech delights investors

The big tech companies from Silicon Valley impressed investors with their outstanding sales and earnings momentum. The growth rate of earnings per share (EPS) for these companies averaged just under 30% – significantly higher than the 7.7% earnings growth achieved by the market-wide S&P 500.

Fed chief under pressure

The US Federal Reserve kept its key interest rates unchanged. Job growth in the US has cooled significantly in recent months, averaging just 35,000 – the weakest momentum since 2010. Fed Chairman Powell faces the delicate task of defining a monetary policy compromise between rising inflation and weakening growth momentum.

IPO market recovery

The market for initial public offerings has recovered. There were 539 IPOs worldwide in the first half of 2025 with a total volume of USD 61.4 billion – a 17% increase compared to the previous year. Historically, strong IPO markets have been seen as an indicator of investor optimism.

Tactical positioning for volatile markets

We are maintaining an equity allocation that sits slightly below our strategic target (beta-adjusted). We continue to view bonds issued by high-quality issuers (investment grade) as an attractive complement to our multi-asset solutions to hedge against ongoing economic risks.

Ready to dive in?

Download the full PDF of our August 2025 Market Compass for a detailed analysis and forward-looking guidance on navigating today's financial markets.

Do not hesitate to contact us with any questions about the topics discussed. We are happy to assist you with our expertise.