US stock market prediction for August: Key events may drive volatility in S&P 500, Nasdaq

TOI World Desk | TIMESOFINDIA.COM | Aug 06, 2025, 21:42 IST

( Image credit : TIL Creatives )

Highlight of the story: US stock market investors are bracing for a volatile August 2025, influenced by President Trump's trade policies. New import duties on goods from 69 countries take effect on August 7. The US-China trade truce expiration on August 12 could trigger renewed tariffs. Furthermore, the end of the 'de minimis' exemption on August 29 will impact e-commerce.

As August begins, investors in the US stock market are bracing for potential volatility amid a series of tariff-related developments and key political decisions. Historically a choppy month for markets due to lighter trading volumes and investor caution, August 2025 is shaping up to be particularly significant as U.S. President Donald Trump’s aggressive trade policies take center stage.

In July, markets saw mixed results as earnings season, inflation data, and Federal Reserve policy speculation influenced investor sentiment. Now, three critical dates in August are expected to have a substantial impact on the S&P 500, Nasdaq, and Dow Jones.

Key dates to watch

August 7: President Trump’s latest tariff order comes into effect. Under this directive, the US will begin implementing “reciprocal” import duties ranging from 10% to 41% on goods from 69 countries. The administration says the move is intended to level the playing field and respond to nations with long-standing trade imbalances against the US. Trump also indicated the US would impose economic penalties on Russia if progress toward ending the war in Ukraine remains stalled.

August 12: The expiration date of the current trade truce between the US and China. If no extension is granted, the US could reimpose heavy tariffs — possibly returning to triple-digit levels — on a wide range of Chinese goods. Analysts warn that such a move could reignite a trade war, disrupt global supply chains, and put significant pressure on technology and manufacturing stocks.

August 29: An executive order suspending the long-standing “de minimis” exemption will take effect. This rule had previously allowed imports under $800 to enter the US duty-free if shipped outside official postal systems. From this date, all such packages will be subject to full customs duties, potentially hitting e-commerce platforms and small international sellers.

Investor concerns rise

Investors and economists are expressing concern over the growing politicization of trade and its potential long-term effects on market stability. While Trump’s policies are aimed at boosting domestic manufacturing and reducing trade deficits, they are also adding layers of uncertainty to an already sensitive economic environment.

August’s developments will test the resilience of markets that have, until now, remained largely optimistic in the face of geopolitical risks. Analysts are closely monitoring sectors that are particularly sensitive to trade dynamics, including semiconductors, retail, consumer goods, and automotive.

With monetary policy still uncertain and inflation pressures lingering, the convergence of trade decisions and economic data may result in a volatile few weeks for investors.