Market Movements on a Bustling Morning

A Cautious Start After a Slight Dip

Good morning from Singapore, where the markets have been showing a touch of volatility. As Monday’s session came to a conclusion, stocks experienced a notable decline. The Dow Jones Industrial Average shed 200.52 points, closing at 43,975.09. In tandem, the S&P 500 slipped 0.25%, landing at 6,373.45. Meanwhile, the Nasdaq Composite dropped by 0.3% to a close of 21,385.40.

Asia-Pacific Markets Begin on a Positive Note

Despite yesterday’s woes in the U.S., Asia-Pacific markets have opened on a brighter note today. Japan’s Nikkei 225 benchmark climbed up by 1.26%, accompanied by the Topix index which gained 0.74% as of 8:07 a.m. Singapore time. In South Korea, the Kospi index added 0.66%, with the smaller-cap Kosdaq increasing by 0.4%.

Over in Australia, the S&P/ASX 200 benchmark remained steady. However, futures tied to the benchmark were slightly down at 8783 compared to Monday’s close of 8,844.80.

U.S. Futures Drift Upwards

U.S. futures have been on a slight ascent during the early Asian hours. The extension of the U.S.-China trade truce has granted the largest economies more time to strike a satisfactory deal. Investors are keenly awaiting the Reserve Bank of Australia’s rate decision. It is widely anticipated that the cash rates will be reduced to 3.6% from 3.85% after their two-day policy meeting concludes.

Prospects for Japan and Hong Kong

Japan’s Nikkei 225 is poised for a higher opening. Futures contracts in Chicago were at 42,295 while, in Osaka, they traded at 42,270, against the last close of 41,820.48. Hong Kong’s Hang Seng index futures stood at 24,765, which points to a slightly weaker opening compared to the previous close of 24,906.81.

Bank of America’s Take on the Fed’s Decision

Bank of America has voiced an intriguing opinion regarding the Federal Reserve’s stance on rate cuts. The most recent [jobs report](https://www.cnbc.com/2025/08/01/jobs-report-july-2025.html#:~:text=U.S.%20added%20just%2073%2C000%20jobs%20in%20July%20and%20(numbers,months%20were%20revised%); argues against a rush to cut rates. Economist Claudio Irigoyen suggests that those advocating for cuts may underestimate labour supply issues and persistent inflation risks. He advises that a September cut might commence an easing cycle without sufficient inflationary evidence.

Moreover, the downward revision of nonfarm payrolls amplifies the likelihood of an alternative scenario, termed ‘bad cuts’, arising from labour market deterioration. BofA perceives current policies as having a mildly stagflationary effect, fraught with uncertainty on the extent of inflation and growth impacts.

Embrace the uncertainties, but here’s hoping for a prosperous trading day ahead!