Global financial markets anticipate turbulent days ahead, confronted by international selloffs, Trump tariffs, and subpar US employment figures.
The global markets have been experiencing a turbulent phase, with a prolonged period of losses starting from July. This week, strong earnings from major tech names have failed to lift broader markets, indicating a broader economic concern.
Investors are keeping a close eye on several fronts, with policy and geopolitical signals driving the next major market moves. The US President Donald Trump's fresh tariffs have contributed to market instability, reviving fears of a renewed trade war. Trump's tariff hike could potentially weigh on global supply chains and corporate earnings.
The US jobs market is showing signs of weakness. The unemployment rate has ticked up, and the July jobs report showed some weakening in payroll growth and elevated unemployment, raising concerns about the economy's resilience. The three-month average for US job growth has dropped significantly.
These factors have led investors and economists alike to upgrade the probability and timeline for Federal Reserve (Fed) easing somewhat earlier than previously forecast. According to the latest market-implied probabilities, such as CME Group's FedWatch Tool, there is an over 80% chance of a Fed rate cut in September 2025. Goldman Sachs Research estimates more than a 50% chance of a 25-basis-point cut in September, followed by additional cuts in October, December, and into 2026.
The Dubai Financial Market (DFM) is another market that investors will be watching closely. The next set of macro triggers could swing risk appetite either way. Until these issues are addressed, markets are likely to remain volatile.
Sources: 1. Goldman Sachs Research, 2025-07-07 2. CBS News (FedWatch data), 2025-08-04 3. Fortune (analysis of July jobs data and Fed cut probability), 2025-08-04 4. Oxford Economics on risk of larger cuts if labor market weakens sharply, 2025-07-09
- The uncertain economic climate, influenced by political and policy decisions such as President Trump's tariffs, has fueled concerns about business resilience and finance stability across global markets.
- With a potential Federal Reserve (Fed) rate cut on the horizon, investors and economists are increasingly focusing on financial news regarding the timing and extent of these cuts.
- General news sources suggest a higher probability of immediate Fed rate cuts and potential additional cuts in the future, driven by the weakening US jobs market and employers' reluctance to hire.
- As the Dubai Financial Market awaits the next set of macro triggers, investors will be closely watching other markets like tech and the broader economy, as they may significantly impact their business and investing strategies.
