Soft opening on Wall Street as Fed outlook and tech results set the tone

Market watchers note that investor focus remains split between earnings developments and the Federal Reserve’s monetary policy outlook.

US stocks opened modestly lower on Monday, 25 August 2025, reflecting cautious investor sentiment following last week’s Wall Street rally. The Dow Jones Industrial Average fell roughly 85 points, or 0.2 percent, while the S&P 500 and Nasdaq Composite each declined about 0.3 percent in early trading.

The market is looking ahead to Nvidia’s quarterly results, scheduled after the bell on Wednesday. Analysts say Nvidia’s performance could set the tone for technology stocks in the coming weeks, particularly within the semiconductor and artificial intelligence sectors. Dell and Marvell are also due to release earnings later in the week, keeping tech in focus.

Market watchers note that investor focus remains split between earnings developments and the Federal Reserve’s monetary policy outlook.

Last week, Federal Reserve Chair Jerome Powell signaled that interest rate cuts could begin as early as September, citing cooling inflation and a softening labor market. The CME FedWatch Tool indicates a 65% probability of a 25-basis-point rate cut at the Fed’s September meeting, with a 35% chance of a 50-basis-point reduction. This dovish stance has fueled a rotation from high-growth tech stocks into cyclical and value sectors, such as financials and industrials, which gained 1.2% and 0.9%, respectively, in early trading. Meanwhile, the technology sector lagged, with the Nasdaq 100 futures down 0.4%.

Recent economic data also shapes sentiment. The Conference Board’s Leading Economic Index rose 0.3% in July, signaling modest growth, but concerns linger over slowing consumer spending, with retail sales growth decelerating to 2.1% year-over-year. Investors are also eyeing the upcoming Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, due later this week, which could further clarify the rate-cut outlook.

Global Markets and Geopolitical Context
In Europe, major indices opened cautiously after last week’s Wall Street rally. The FTSE 100 dipped 0.1%, while Germany’s DAX and France’s CAC 40 each fell 0.2%, reflecting uncertainty ahead of US tech earnings and global monetary policy developments. Asian markets showed mixed results, with Japan’s Nikkei 225 gaining 0.5% on yen weakness, while China’s CSI 300 slid 0.3% amid ongoing property sector concerns.

Geopolitical tensions also remain on investors’ radars. Recent escalations in the Middle East, coupled with uncertainty around US-China trade relations, have bolstered safe-haven assets. Gold prices rose 0.4% to $2,510 per ounce, while the 10-year US Treasury yield held steady at 3.85%, reflecting a cautious but stable bond market.

Energy and Commodities

In commodities, oil prices edged higher as supply concerns resurfaced. West Texas Intermediate (WTI) crude rose 0.6% to $76.20 per barrel, driven by potential disruptions in the Middle East and tightening global inventories. Energy stocks, including ExxonMobil and Chevron, outperformed in early trading, each up about 0.8%, providing a counterbalance to tech sector weakness.

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