This content was published on

August 8, 2025 – 01:32

(Bloomberg) — Asian stocks were set for a cautious open Friday after Wall Street halted a rally that drove stocks to the brink of a record amid concerns about an overheated market.

Equity-index futures in Australia and Hong Kong pointed to losses at the start of trading, while those for Japan indicated gains. Contracts for US stocks edged higher after the S&P 500 closed little changed following the almost 30% advance from its April lows.

The dollar slipped for a sixth consecutive session Friday, poised for its longest losing streak since March 2024. The yen led gains against the greenback among major currencies after Japan’s chief trade negotiator said the US agreed to end so-called stacking on universal tariffs and cut car levies at the same time.

The potentially staid start reflected growing market nerves heading into the weekend amid a slew of tariff headlines. Trade tensions between the US and India are rising, while Trump has signaled new sanctions on Russia could land as early as Friday. Treasury Secretary Scott Bessent also added that China levies “could be on the table” over the buying of Russian oil.

“We’ll see a drift in Asian markets this morning with all eyes still on various geopolitical updates and nothing inspirational on the economic calendar,” said Nick Twidale, chief market analyst at AT Global Markets in Sydney. “I’m expecting relatively quiet markets with a bit of profit taking into the weekend, although these days are the ones that tend to catch traders unaware if something does happen.”

Whether or not the blistering rally in American equities is about to cool, some big firms have warned clients to prepare for a near-term pullback amid sky-high valuations. The S&P 500 has advanced 30% from its April lows. Added to bulls’ worries is seasonality. August and September have historically been the two worst months for the S&P 500.

“We talk about the potential for ‘air pockets’ in this current environment based primarily on headline risk, which remains elevated in our view,” said Dan Wantrobski at Janney Montgomery Scott. “This renders them vulnerable to pullbacks as we enter the second half of 2025.”

Australian bonds slipped, tracking Treasuries after Thursday’s $25 billion bond sale followed poor results for three- and 10-year debt auctions this week. Long-end gains faded, leaving 30-year yields about one basis point higher at 4.83%. The yield on 10-year bonds rose two basis points to 4.25%.

On the economic front, US continuing jobless claims surged to the highest since November 2021, adding to recent signs that the labor market is weakening.

Meantime, Federal Reserve Governor Christopher Waller is emerging as a top candidate to serve as the central bank’s chair among President Trump’s advisers as they look for a replacement for Jerome Powell, according to people familiar with the matter.

Trump said he had chosen Council of Economic Advisers Chairman Stephen Miran to serve as a Fed governor. The US president said that Miran, who will need to be confirmed by the Senate, would only serve the expiring term of Adriana Kugler, which expires in January.

“Depending on the president’s perception of his performance, he may also be a contender to replace Chair Powell when his term ends in May,” Joseph Capurso, head of international economics at Commonwealth Bank of Australia wrote in a note to clients. “While we expect Miran to advocate for lower interest rates, we do not consider he will push the FOMC to cut the Funds rate if the data does not support a cut.”

Elsewhere, the Bank of England cut rates to the lowest in over two years in a closer-than-expected decision that leaves investors with what Governor Andrew Bailey called “genuine uncertainty” on its next move. The pound climbed.

Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.2% as of 8:25 a.m. Tokyo time Hang Seng futures fell 0.6% S&P/ASX 200 futures fell 0.3% Currencies

The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1677 The Japanese yen rose 0.3% to 146.77 per dollar The offshore yuan was little changed at 7.1790 per dollar The Australian dollar was little changed at $0.6527 Cryptocurrencies

Bitcoin rose 0.2% to $117,418.08 Ether rose 0.6% to $3,900.25 Bonds

The yield on 10-year Treasuries advanced two basis points to 4.25% Japan’s 10-year yield declined one basis point to 1.485% Australia’s 10-year yield advanced one basis point to 4.25% Commodities

West Texas Intermediate crude was little changed Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

©2025 Bloomberg L.P.