During the month of August, equity and fixed income markets performed positively worldwide. The Russell 2000 index, composed of small-cap companies, led the way with a gain of 7.1% for the month, while the S&P 500 and the Nasdaq posted solid gains of 1.91% and 1.58%, respectively. So far this year, technology continues to drive the market, with the Nasdaq up 22% over the last twelve months. The rotation towards smaller-cap issuers in August contrasts with the dominant trend of recent months, marked by the leadership of large growth companies related to artificial intelligence. When analyzed by sector, the Health Care sector stood out as the best performer during the month, while in the year-to-date the Communication sector continues to stand out. On the other hand, Consumer Discretionary and Healthcare continue to lag in the year-to-date. In terms of investment styles, the Large Cap Growth segment leads in the year with a return of 13%, although in August the recovery of Small Caps set the tone for investment flows.

In the fixed income market, there was a generalized decrease in the Treasury bond rate. The 2-year bond closed at 3.59%, 35 basis points below the previous month, while the 10-year bond closed at 4.23%, down 14 basis points. This compression in the short end of the curve reflects a recalibration of expectations regarding the Federal Reserve's monetary policy, where the market expects more aggressive rate cuts in the coming months.

During the Jackson Hole Symposium, Fed Chairman Jerome Powell adopted a dovish tone, noting that "the changing balance of risks may warrant an adjustment in our monetary policy stance" and highlighting a shift in the narrative: less focus on tariffs and more emphasis on labor market dynamics, which have weakened recently. Throughout August, interventions by various Fed officials reinforced the perception of a greater openness to rate cuts. On the political front, President Trump's decision to "remove" Fed Governor Lisa Cook reignited the debate over the central bank's independence, which was reflected in a slight steepening of the Treasury yield curve. Subsequently, the White House nominated Stephen Miran to temporarily fill the vacancy on the Fed's Board of Governors, and if confirmed by the Senate, he is expected to support looser monetary policy with lower interest rates. The sense of the Fed's loss of independence adds uncertainty in a complex fiscal and political context in the U.S., where concerns persist about the long-term sustainability of public finances. High deficits and rising debt put pressure on the perception of sovereign risk, generating debate about the country's credit rating and limiting the government's room for maneuver.

Gold, meanwhile, reached a new all-time high, appreciating almost 6% in August and accumulating yields of over 30% for the year. This performance has been favored by factors such as lower interest rate expectations, reduced confidence in the Fed and the weakening of the dollar against the main currencies. Likewise, the high geopolitical uncertainty and the growing participation of central banks worldwide in the purchase of this metal continue to reinforce its attractiveness as a safe-haven asset.

At the local level, the Bank of Mexico slowed the pace of cuts at its last meeting, with a 25 basis point drop, leaving the monetary policy rate at 7.75%. The Board noted that "going forward it will consider additional cuts" and, considering the forward guidance, the inflationary outlook, the stagnation of economic activity and the expectation of cuts by the Fed, it maintains the projection of one or two additional 25 basis point reductions during the remainder of the year.

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