Developed market (DM) equities continued to grind higher (MSCI World Index +2.6% MoM), leaving them 14% up two-thirds of the way through 2025. Healthcare stocks delivered a strong performance in August (+5.4% MoM), which was enough to drag them into positive territory for the year (+0.8% YTD), though they remain the US stock market’s worst-performing sector in 2025. United Healthcare (+24% MoM) was a key contributor to the sector’s strong August performance as Warren Buffett’s Berkshire Hathaway announced that it had purchased 5mn shares in the company, which had seen its share price halve in April and May as it slashed earnings guidance. US small-cap shares, another sector of the stock market which has underperformed YTD, also surged in August (Russell 2000 Index +7% MoM).
Emerging market (EM) stocks underperformed their DM peers (MSCI EM +1.5% MoM), though the EM stock index has yet to deliver a negative month in 2025, and August’s positive performance nudged the benchmark towards a 20% gain for the year (MSCI EM +19.7% YTD). Chinese shares remain a key driver of EM stocks in 2025, with Chinese companies listed in Hong Kong up 26% YTD.
The US government’s 10-year borrowing rate fell early in August (to 4.2% p.a.) after significantly worse-than-anticipated US employment data. This included material downward revisions to the prior months’ data that left the 3-month average job gains in the US at c. 35,000 p.m., well below the 200,000-plus monthly job adds associated with a healthy US labour market.
The greenback stumbled again in August (US Dollar Index -2.2% MoM) as the US dollar’s July bounce turned out to be a temporary respite for the currency. The US dollar has now fallen in seven out of eight months in 2025, leaving the US Dollar Index down 10% YTD. Gold, which had seen its price surge by c. 30% in the first few months of the year, has been range-bound for the past few months, but the price jumped again in August (+4.8% MoM). Crude oil, which had seen its price spike above US$70/bbl in late July as US President Donald Trump hardened his stance towards Russia, saw its price fall back to US$68/bbl in August (-6.1% MoM).
