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Endowus invites you to our exclusive event with Macquarie Asset Management, as we discuss unlocking opportunities in Infrastructure- a $1.3tn asset class.
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August delivered a partial rebound from July’s AI-driven pull back: the Philadelphia Semiconductor Index (SOX Index) recovered 2.0% and the Nasdaq 100 rose 4.2%. The broader market pushed further ahead, with the S&P 500 Index gaining 2.7% and most sectors ending the month in positive territory. Software outperformed semiconductors for the second straight month, suggesting a broadening of the AI trade.
There was no FOMC meeting in August but all eyes were on new Fed chair Kevin Warsh’s first Jackson Hole address on August 28. Warsh struck a hawkish tone, noting the Fed “may have work to do” on inflation. At the 15–16 September meeting, the FOMC voted unanimously—12–0—to lift the target range by 25 basis points to 3.75%–4.00%.
Global equity
Global equities advanced 2.8% in USD terms in August, a broad-based recovery after July’s flat print. Growth reasserted itself over value in August (the Russell 1000 Growth Index was up 3.7%, while the Russell 1000 Value Index only rose 1.9%), reversing the more than 8 percentage point July underperformance.
Regional performance (in USD) was largely a reversal of July, with Taiwan rebounding sharply by 9.1% after July’s 7.8% drop. Korea also gained 8.8% after the 16.2% pull back in July. In contrast, HK-listed Chinese equities (HSCEI), July’s top regional performer, gave back 1.1% as the rally proved short-lived against soft domestic demand data.
On a sector basis, energy continued to be strong. However, it was joined by materials, technology and healthcare, highlighting a broadening rally. Consumer staples, utilities and industrials lagged.
Global fixed income
Fixed income markets were considerably calmer compared to July’s selloff, also due to a mid-month intervention by the US Treasury, whose effects were, however, short-lived. By month-end, Warsh’s hawkish Jackson Hole remarks had reversed much of that move at the short end with the 2-year yield jumping on the news. The 10-year treasury finished August at roughly 4.75% its highest close since January 2025 and modestly above July’s 4.73%
The Bloomberg Global Aggregate (unhedged on a USD basis) rose 0.5% in August, an improvement from its 0.5% and 0.7% decline in July and June, respectively. Global and US high yield led as spreads narrowed and emerging market debt also outperformed, though buying has become more selective after a strong run. Core government bond yields outside the US continued to grind higher with the German 10-year Bund rising 12 bps to 3.32% and Japan’s 10-year JGB rising 14bps to a multi-decade high of 2.94%.
Commodities
Commodities extended their run as the best-performing asset class for a second consecutive month with the Bloomberg Commodity Index (BCOM) up 7.1% (+29% YTD). Gold was the standout, surging 9.7% to end August near USD4,437 and in positive territory YTD.
Oil was comparatively subdued after July’s round trip volatility. Brent held mostly in an $87-95/barrel range (except earlier in the month) through August, ending the month near $91, as the Strait of Hormuz standoff between the US and Iran remained unresolved.
Note: Figures in this article are based on Morningstar and Bloomberg data.
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We are heading into bubble trouble
Endowus 2020 review and 2021 outlook
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