Global stocks closed mostly flat to slightly lower on Monday, August 18, 2025, as investors awaited a pivotal central bank summit later this week, where policymakers are expected to provide clearer guidance on the trajectory of U.S. interest rates.
Market attention was also drawn to the meeting between Ukrainian President Volodymyr Zelenskiy and U.S. President Donald Trump. Trump stated that Washington would support Europe in guaranteeing security for Ukraine as part of any eventual peace deal to end Russia’s war. Both leaders are also advocating for a trilateral dialogue with Russian President Vladimir Putin.
Despite the high-level talks, financial markets registered little movement. “I don’t really see anything big in this or anything new or tangible,” said Marc Chandler, chief market strategist at Bannockburn Forex in New York. He added, “For Ukraine and the EU, their argument is basically Russia took Crimea and it wasn’t good enough for them. Now they’re trying to take more of Ukraine. And even now with all these negotiations going on, Russia is trying to make a bigger offensive push.”
The Zelenskiy-Trump discussions came after the recent Alaska summit with Putin, which concluded without an agreement. Trump appeared to signal stronger alignment with Moscow’s preference for a comprehensive peace deal, rather than pursuing a ceasefire first.
On Wall Street, the S&P 500 closed largely unchanged but stayed within reach of its record high set on Friday. In Europe, the STOXX 600 finished slightly higher after last week’s peak, while the MSCI All Country World Index ended marginally lower but close to its own all-time high. Earlier in Asia, Japanese and Taiwanese benchmarks reached new records, and Chinese equities hit their highest level in a decade.
Markets are now firmly focused on the Federal Reserve’s annual Jackson Hole symposium, scheduled for August 21–23. Fed Chair Jerome Powell is expected to address the economic outlook and provide signals on monetary policy. Futures trading suggests an 85% probability of a quarter-point rate cut at the September 17 Fed meeting, with additional easing anticipated before year-end. Analysts, however, expect Powell to remain cautious, withholding firm commitments until August employment and inflation data are released.
Optimism over looser borrowing conditions has supported equities globally, with Japan’s Nikkei notching a fresh record high. MSCI’s broadest Asia-Pacific index outside Japan ended flat after reaching a four-year peak last week. In Europe, Germany’s DAX slipped 0.2%, while London’s FTSE 100 added 0.2%.
Robust Earnings Drive U.S. Stocks
In the United States, corporate earnings remain a major catalyst. The S&P 500 posted an 11% annual growth in earnings per share, with 58% of companies upgrading their full-year guidance. Analysts at Goldman Sachs noted, “Earnings results have continued to be exceptional for the mega-cap tech companies.” Upcoming results from Home Depot, Target, Lowe’s, and Walmart are expected to provide further insight into consumer spending trends.
Bond, Currency, and Commodity Markets
In the bond market, the U.S. yield curve steepened, with the gap between two-year and 10-year Treasury yields widening to 57.8 basis points, the highest since mid-July. Longer-term yields rose more sharply, reflecting rising inflation expectations.
The dollar weakened against a basket of major currencies, slipping 0.3% to 98.114. It gained 0.4% against the yen at 147.82, while the euro edged down 0.3% to $1.1667.
In commodities, gold traded flat at $3,333 an ounce after last week’s 1.9% decline. Oil prices rose modestly following the Trump-Zelenskiy meeting, though the talks produced no significant breakthroughs. Brent crude gained 1% to $66.52 a barrel, while U.S. crude increased 0.9% to $63.34.
