Amazon(US:AMZN) Sou Hu Cai Jing·2025-08-03 22:19Core Viewpoint - The financial markets faced a sudden storm in August, primarily driven by disappointing economic data, particularly the U.S. non-farm payroll report for July and significant revisions to previous months' data, raising concerns about the U.S. economic recovery and the Federal Reserve's monetary policy direction [1][2]. Economic Indicators - The final value of the S&P Manufacturing PMI was reported at 49.8%, while the ISM Manufacturing PMI was even lower at 48, indicating a contraction in the manufacturing sector for the first time since December of the previous year [2]. - The University of Michigan Consumer Sentiment Index also fell short of expectations, ending at 61.7, further painting a bleak picture of the economy [2]. Market Reactions - Major U.S. stock indices, including the Dow Jones Industrial Average, Nasdaq Composite, and S&P 500, experienced significant declines, with the Dow down 1.38%, Nasdaq down 1.92%, and S&P 500 down 1.51% [6]. - The technology sector was particularly hard hit, with notable declines in stocks of major companies such as Amazon, which fell by 6.38% due to disappointing earnings expectations [1][6]. Inflation and Interest Rate Expectations - One-year inflation expectations surged to 4.5%, exceeding market forecasts, while five-year expectations decreased, indicating persistent short-term inflationary pressures [3]. - The anticipation of a potential interest rate cut by the Federal Reserve gained traction, leading to a significant drop in the U.S. dollar index, which fell by 1.12% to 98.8510 [5]. Global Market Impact - The risk-averse sentiment spread globally, affecting European markets, with major indices like the FTSE 100, DAX, and CAC 40 all experiencing declines, some exceeding 2.7% [5]. - The weakening dollar contributed to increased volatility in global markets, with non-U.S. currencies appreciating against the dollar [5]. Future Outlook - The upcoming non-farm payroll data for August is expected to be a critical focus for the market, as it will influence perceptions of the U.S. economic recovery and potential capital outflows [7]. - The current market turmoil highlights underlying structural issues within the U.S. economy, with a fragile market sentiment that may lead to further volatility in the future [7].