September 2025 Market Outlook
U.S. Market Rally and Policy Shifts – August 2025
In August 2025, U.S. equities surged as trade policy clarity reduced uncertainty—especially for big tech. The S&P 500 rose 2.2%, and the Nasdaq jumped 3.7%. Meanwhile, the 10-year Treasury yield eased to 4.231%, down from a monthly peak of 4.5%.
Goldman Sachs revised its interest rate outlook in late May, now projecting three rate cuts in 2025—scheduled for September, October, and December—triggering a broad decline in bond yields across the curve.
Tariff Agreement with US
| Country | Previous U.S Tariff | New U.S Tariff | Counterparty Commitments |
|---|---|---|---|
| Japan | 27.5% on automotives | 15% on most goods | Commits to invest USD 550 billion in US bond market. |
| European Union | 30% tariff on most goods | 15% on most goods |
|
| Indonesia | 32% tariff on most goods | 19% on most goods |
|
| Philippines | 20% tariff on most goods | 19% on most goods | Indicates zero tariffs for a range of U.S. goods |
| Malaysia | 25% tariff on most goods | 19% on most goods |
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| China | 145% tariff on most goods | 90-day extension from 12 August 2025 | De-escalation window ahead of Trump-Xi meeting in Q4’25 |
Malaysia’s First Rate Cut Since 2020
On July 9, Bank Negara Malaysia (BNM) cut the Overnight Policy Rate by 25 basis points to 2.75%—its first drop below 3% since March 2023. The move boosts the property sector by lowering mortgage rates, improving affordability, enhancing loan eligibility for first-time buyers, and reducing financing costs for developers—stimulating new home sales.
Semiconductor Industry Incentives
At SEMICON Southeast Asia 2025, MITI announced a USD 21 million strategic fund to support Malaysia’s chip industry. The initiative targets IC design, advanced packaging, and ecosystem development—reinforcing Malaysia’s role in the global semiconductor supply chain, where it contributes ~13% of the global Outsourced Semiconductor Assembly and Test (OSAT).
Surge in Malaysia’s Digital FDI
Digital FDI in Malaysia soared 125% in Q2 2025, reaching RM29.47 billion, driven by data centres and cloud investments from Singapore, the U.S., and China. Johor led with 42 approved data centre projects and a record-low vacancy rate of 1.1%, spurring land acquisitions and infrastructure upgrades—elevating regional real estate values.
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