August 2024 — A short-lived sell-off

August was an eventful month for investors. It started tumultuously with disappointing U.S. economic data and an interest rate hike by the Bank of Japan, which caused a massive wave of selling on the global stock markets. The volatility index, which reflects investors’ level of uncertainty, surged to its highest level since 2020. 

The sell-off was short-lived, however. The stock markets gradually recovered during the month, buoyed by expectations of an imminent interest rate cut by the U.S. Federal Reserve (Fed). The global stock markets even ended the month on a positive note, thanks to encouraging growth data and subdued U.S. inflation.