Daily Brief | August 29 2025

Top News

·     In the U.S., consumption started the third quarter with strength and core PCE inflation rose again.

·     Later today, the University of Michigan’s Consumer Sentiment Index for August will be released, with market consensus expecting it to come in around 58.6 points.

·     Federal Reserve Governor Christopher Waller stated in his latest remarks on monetary policy that he will support a 25bp rate cut at the September meeting and anticipates further cuts ahead.

·     Inflation in Germany rose from 1.8% in July to 2.1% in August, exceeding the market consensus estimate of 2.0%.

Economic Outlook

In the U.S., consumption started the third quarter with strength and core PCE inflation rose again. In July, disposable personal income and personal consumption expenditures increased by 0.4% and 0.5% m/m in nominal terms, respectively. Annual PCE inflation—the Fed’s preferred inflation gauge—stood at 2.6%, unchanged from the previous month and in line with market consensus. Core PCE, which excludes food and energy, reached 2.9% in July, up from 2.8% in June. On a monthly basis, headline PCE rose 0.2% and core PCE advanced 0.3%. Overall, the figures indicate that the U.S. economy began the third quarter with solid momentum in its most important sector—consumption—while core inflation increased for the fourth consecutive month.

Markets and Stocks

U.S. equity futures traded lower this morning after the S&P 500 closed at a new record yesterday. The July PCE inflation report came in above expectations, with the core component rising 2.9% y/y. At the same time, investors remain focused on the standoff between the White House and the Federal Reserve, after Donald Trump reiterated his push to remove Governor Lisa Cook. In Europe, markets retreated, while in Asia trading was mixed: Japan’s Nikkei fell 0.26% after Tokyo inflation came in at 2.5% y/y, below the prior month, whereas Hong Kong and China posted moderate gains.

In commodities, oil prices fell this morning but remained on track for weekly gains, while gold held steady at $3,416 per ounce.

In fixed income, U.S. Treasury yields rose following the inflation data, with the 10-year yield climbing to 4.23% and the 2-year steady at 3.64%.

Corporate News

– Dell Technologies shares fell more than 5% after reporting weaker AI server orders compared to the prior quarter and lower-than-expected margins in that unit. Still, the company raised its full-year guidance, forecasting $107 billion in revenue and EPS of $9.55, above estimates.

– Caterpillar warned that tariffs could generate an impact of up to $1.8 billion in 2025, leading to a nearly 3% drop in its stock.

– Super Micro Computer acknowledged material weaknesses in its internal financial reporting controls, which could hinder timely and accurate disclosure of results. The company had already faced reporting delays and its auditor’s resignation last year. Shares are up 44% in 2025 but remain highly volatile.