Monthly Market Review - August 2025
August 2025 extended the summer rebound as trade headlines eased and central-bank signals stayed supportive. The MSCI World Islamic Index* rose 1.7%* for the month, lifting its year-to-date (YTD) return to 10.8%, while the Dow Jones Sukuk Index* gained 1.0%, taking its YTD return to 5.7%. U.S. dollar fell 2.2% for the month while gold closed in on its best monthly gain since April, rising nearly 5%, amid rate-cut expectations.
In the United States, stocks set a series of record closes late in the month, supported by strong earnings and rate cut expectations. Inflation was up 2.7%* year over year (unchanged from prior readings), while the manufacturing index (PMI) was 53.3%*, indicating expansion. US economy grew by 3.3%* in Q2, above expectations of 3.0%, marking a solid rebound from previous quarter’s contraction. The Fed chair acknowledged rising labor market risks in its annual Jackson Hole conference, signaling chances of a rate cut in September.
The Bank of England delivered a widely expected 25 bps* cut in early August, lowering Bank Rate to 4.0% as growth softened and concerns around inflation remained. Inflation rose to 3.8%* year over year in July, highest in 18 months, while on the other hand, economic activity remained weak (manufacturing index 47*). The housing market showed some signs of improvement, with July prices rising and affordability improving as mortgage rates eased.
In the Eurozone, the economic landscape improved marginally. Annual inflation remained range bound at 2.1%*, in line with European Central Bank’s (ECB) target. European economy marginally recovered with the manufacturing index rising to 50.7*, moving back above the 50 line for the first time since July 2022, indicating slight improvement. The European Central Bank kept its deposit rate at 2.0%, noting that future moves will depend on the data.
China’s economy remained weak with official manufacturing PMI came in at 49.4* in August, remaining below 50 for the fifth straight month of contraction. Authorities continued policy support amid external trade uncertainty and pressure in parts of industry such as solar manufacturing. A 90-day extension of U.S.–China trade talks helped near-term sentiment, but the outlook still depends on domestic demand and the path of global trade.
Looking ahead, markets remain sensitive to policy actions, trade negotiations, and geopolitical developments. Investors are advised to stay diversified and vigilant, carefully managing portfolios in anticipation of continued volatility and evolving economic conditions.
Disclaimers:
*The MSCI World Islamic Index is a stock market index that measures the performance of large and mid-cap companies across developed markets that comply with Sharia investment principles.
*The Dow Jones Sukuk Index is a benchmark that measures the performance of global, investment-grade, U.S. dollar-denominated Islamic bonds, also known as sukuk, which have been screened for compliance with Sharia law.
*A basis point (bps) is a standard unit of measure in finance equal to one-hundredth of a percentage point (0.01%), used to precisely denote changes in interest rates, bond yields, and other financial percentages.
Sources
*APNews. (2025, 08 31). China’s factory activity contracts in August despite extension of trade truce with US. Retrieved from apnews: https://apnews.com/article/china-manufacturing-pmi-august-1db70afa980bbb5665fcbd0c31d0b919
*Cable, J. (2025, 08 21). Euro zone business activity accelerates in August as new orders grow, PMI shows. Retrieved from Reuters: https://www.reuters.com/world/europe/euro-zone-business-activity-accelerates-august-new-orders-grow-pmi-shows-2025-08-21
*Christina Anagnostopoulos, F. S. (2025, 08 23). Jackson Hole as it happened: Wall Street rallies after Powell hints at possible Fed rate cut. Retrieved from Reuters: https://www.reuters.com/world/latest-updates-fed-chair-powell-jackson-hole-fed-conference-2025-08-22
*Milliken, D. (2025, 08 01). UK house prices rise modestly in July, affordability improves, Nationwide says. Retrieved from Reuters: https://www.reuters.com/business/finance/uk-house-prices-rise-modestly-july-affordability-improves-nationwide-says-2025-08-01
*Qureshi, A. C. (2025, 08 29). Gold on track for best month in four as inflation data bolsters rate cut bets. Retrieved from Reuters: https://www.reuters.com/world/india/gold-track-best-month-four-inflation-data-bolsters-rate-cut-bets-2025-08-29
*Reuters. (2025, 08 20). China says solar sector needs to curb overcapacity. Retrieved from Reuters: https://www.reuters.com/sustainability/climate-energy/china-says-solar-sector-needs-curb-overcapacity-2025-08-19
*William Schomberg, D. M. (2025, 08 07). Bank of England cuts rates to 4% after narrow 5-4 vote. Retrieved from Reuters: https://www.reuters.com/markets/rates-bonds/bank-england-cuts-rates-4-after-narrow-5-4-vote-2025-08-07
Risk Warning: Equity investments are not readily realisable and involve risks, including loss of capital, illiquidity, lack of dividends and dilution, and it should be done only as part of a diversified portfolio. Investments of this type are only for investors who understand these risks. You will only be able to invest in the company once you have met our conditions for becoming a registered member.
Please visit www.wahed.com/uk/ventures/risk for our full risk warning.
Risk Warning: As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
Please visit www.wahed.com for our full terms and conditions
Maydan Capital Limited, trading as WahedX, is registered in England and Wales (Company No. 13451691), registered office: 87-89 Baker Street, London, W1U 6RJ, UK. Maydan Capital Ltd (FRN: 963613) is an appointed representative of Wahed Invest Ltd (FRN: 833225), an authorised and regulated firm by the Financial Conduct Authority.Wahed Invest Ltd. is registered in England and Wales (Company No. 10829012), registered office: 87-89 Baker Street, London, W1U 6RJ, UK and is authorised and regulated by the Financial Conduct Authority: FRN 833225.
Subscribe For More Islamic Finance Content
As with any investment, a Wahed Invest Ltd investment puts your money at risk, as the value of your investment can go down as well as up. The tax treatment of your investment will depend on your individual circumstances and may change in the future. If you are unsure about whether investing is right for you, please seek expert financial advice.
Wahed Invest LLC (Wahed) is a US Securities and Exchange Commission (SEC) registered investment advisor. Wahed Invest provides brokerage services to its clients through its brokerage partner Apex Clearing Corporation, a member of NYSE - FINRA - SIPC and regulated by the SEC and the Commodity Futures Trading Commission. Registration does not imply a certain level of skill or training. Wahed does not intend to offer or solicit anyone to buy or sell securities in jurisdictions where Wahed is not registered or a region where an investment practice like this would be contrary to the laws or regulations. Any returns generated in the past do not guarantee future returns. All securities involve some risk and may result in loss. Any performance displayed in the advertisements or graphics on this site are for illustrative performances only.
Disclaimer: Wahed Technologies Sdn Bhd ("Wahed") is a Digital Investment Manager (DIM) licensee issued by Securities Commission Malaysia (eCMSL/ A0359/2019). It is part of Wahed Inc. Wahed is authorized to conduct a fund management business that incorporates innovative technologies into automated portfolio management services offered to clients under a license issued pursuant to Schedule 2 of the Capital Markets Services Act 2007. All investments involve risks, including the possibility of losing the money you invest, and the track record does not guarantee future performance. The history of returns, expected returns, and probability projections is provided for informational and illustrative purposes, and may not reflect actual future performance. Wahed is not responsible for liability for your trading and investment decisions. It should not be assumed that the methods, techniques, or indicators presented in this product will be profitable, or will not result in losses. The previous results of any trading system published by Wahed, through the Website or otherwise, do not indicate future returns by that system, and do not indicate future returns that will be realized by you.
Wahed Invest Limited is regulated by ADGM’s Financial Services Regulatory Authority (“FSRA”) as an Islamic Financial Business with Financial Services Permission for Shari’a Compliant Regulated Activities of Managing Assets and Arranging Custody [Financial Permission No. 220065]. Our ADGM Registered No. is 000004971.
Wahed assumes no obligation to provide notifications of changes in any factors that could affect the information provided. This information should not be relied upon by the reader as research or investment advice regarding any issuer or security in particular. Any strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. Furthermore, the information presented may not take into consideration commissions, tax implications, or other transactional costs, which may significantly affect the economic consequences of a given strategy or investment decision. This information is not intended as a recommendation to invest in any particular asset class or strategy or as a promise of future performance.
There is no guarantee that any investment strategy will work under all market conditions or is suitable for all investors. Each investor should evaluate their ability to invest long term, especially during periods of downturn in the market. Investors should not substitute these materials for professional services and should seek advice from an independent advisor before acting on any information presented. Any links to third-party websites are provided strictly as a courtesy. We make no representation as to the completeness or accuracy of information provided at these websites nor do we endorse the content and information contained on those sites. When you access one of these websites, you are leaving our website and assume total responsibility and risk for your use of the third-party websites.
