In August 2024, global financial markets experienced high volatility, influenced by fears of a possible recession in the United States, an unexpected rise in interest rates in Japan, and mixed signals from major central banks. Although the end of the month saw a recovery, stocks performed erratically, with a sharp drop early on when investors feared an economic slowdown. However, more favorable economic data and statements by Federal Reserve Chairman Jerome Powell, in which he indicated the possibility of a future interest rate cut, encouraged a return of investors to the market.
The S&P 500 index posted a significant initial loss (-6%) due to global economic uncertainties, but closed the month with a gain of 2.30%, supported by positive economic data in the final weeks of August. The Nasdaq, while suffering a more pronounced correction (-8%) due to weakness in the technology sector, managed to recover some of its losses, closing up 0.65%, thanks to strong demand for semiconductors and artificial intelligence-related technologies.
In Europe, stock markets also showed some volatility. The Euro Stoxx 50 index closed up 1.75%, despite lingering concerns regarding the slowdown in the German manufacturing sector and inflation in the euro area. The Swiss market followed a similar trend, with the SMI index closing the month up 1%, recovering from an initial drop of 6.30%.
The commodities market experienced mixed trends. Gold prices reached a new all-time high, touching USD 2,535 an ounce, driven by growing demand for safe-haven assets amid macroeconomic uncertainty and dollar weakness. In contrast, Brent oil fell 6.30%, following expectations of increased supply from OPEC and slowing demand in China.
The outlook for financial markets in the coming months points to persistent volatility, with a mix of risks and opportunities. Investors will continue to closely monitor the decisions of central banks, particularly the Federal Reserve and the European Central Bank, as well as global economic data and geopolitical tensions, to guide their investment strategies. Although there are positive signs of stabilization, the economic environment remains complex and subject to rapid change.