Global equity markets lagged this week due to uncertainty surrounding the Federal Reserve’s (Fed) potential policy stance at the economic symposium in Jackson Hole. U.S. Treasury Secretary Scott Bessent expressed the Trump administration’s approval of revenue flows from tariffs in the U.S.-China trade deal. The unveiling of the EU-U.S. trade deal details weighed on European markets. European defense stocks also declined following talks between President Trump, European leaders, and President Volodymyr Zelenskyy.

In global events, the People’s Bank of China (PBoC) held its policy rate steady. Hurricane Erin hit the U.S. east coast. President Volodymyr Zelenskyy and European leaders met President Donald Trump at the White House earlier in the week. President Trump plans to arrange a meeting between President Putin and President Zelenskyy to discuss a peace deal between their two countries. President Putin has reportedly laid down conditions for peace, which include blocking access for Western troops in Ukraine and the renunciation of its aspirations to join NATO, along with its claims on the Donbas region.

Global Updates
  • The MSCI All Country World Index declined this week, closely tracking U.S. market moves. European investors also reviewed the conditions of the U.S.-Europe trade deal, under which the EU committed to purchasing $750 billion in energy and investing $600 billion in the U.S., in exchange for a 15% tariff. Automotive securities fell, while pharmaceutical stocks rose, driven by sector-specific factors. Germany’s GDP contracted by 0.3% in the second quarter, which was greater than the preliminary estimate of a 0.1% decline.
  • U.K. inflation came in higher than expected at 3.8% in July, attributed to increased travel costs during the summer holidays in U.K. schools.
  • Japan’s headline and core inflation rates cooled to 3.1% in July, due to easing food and rice prices. The softer inflation numbers will be considered by the Bank of Japan when deciding whether to raise its policy rate in September.
  • SoftBank’s stock price fell after the Japanese banking giant announced a $2 billion investment in the struggling American tech company Intel.
  • Japan’s exports declined by 2.6% year-over-year in July, exceeding expectations. This drop was driven by contractions of 10.1% in exports to the U.S. and 3.5% to China.
  • The People’s Bank of China (PBoC) left its policy rates unchanged this week, supported by ongoing economic recovery and narrow profit margins for lenders. The PBoC plans to strategically loosen monetary policy and enhance liquidity later in the year.
  • Singapore’s non-oil exports contracted by 4.6% in July, a larger decline than the earlier estimate of 1.8%.
  • Indian equities advanced following the announcement of a simplified taxation regime that is expected to lower taxes on automotive and other major household expenditures. India’s HSBC Composite Flash Purchasing Managers’ Index (PMI) rose to 65.2 in July from 61.1 in June, indicating increased private sector activity.
U.S. Equity
  • The S&P 500, Nasdaq, and Dow Jones indices declined this week, reflecting the prevailing risk-off sentiment among investors. Investors awaited the Federal Reserve’s policy guidance and Chair Jerome Powell’s address scheduled for Friday. Mixed corporate earnings also disappointed market participants.
  • The Jackson Hole Economic Symposium commenced this week, with investors focused on Chair Powell’s address for insights on the Fed’s economic assessment and to clarify policy direction for both the near and long term.
  • Initial jobless claims for the week ending August 15 rose to a higher-than-anticipated 235,000, and continuing claims increased to 1.97 million. However, S&P Global’s Flash U.S. Composite PMI indicated increased private sector activity, rising to 55.4 in August.
  • Nvidia has paused logistics operations with Amkor Technology and Samsung Electronics—key suppliers for the H20 chip—affecting exports to China. The Chinese government has instructed domestic technology companies to cease purchasing H20 chips, citing security concerns. Nvidia has also reportedly asked Foxconn to halt related activities.
  • Intel’s stock price rose following SoftBank CEO Masayoshi Son’s announcement of a $2 billion strategic investment in the company.
  • Walmart shares fell after the company reported an adjusted EPS of $0.68 for the second quarter, missing analysts’ estimates. However, Walmart’s revenue grew 5% to a higher-than-expected $177.4 billion, enabling the retailer to raise its full-year revenue and profit forecasts.
  • Target shares declined after the retailer posted weak sales and announced a leadership change. Second-quarter store sales fell by 1.9% and the operating income margin dropped to 5.2%, reflecting headwinds from tariffs, market share losses to Walmart and Amazon, order cancellations, and softer discretionary demand. Target reported an EPS of $2.05 on higher-than-expected net sales of $25.21 billion. Chief Operating Officer Michael Fiddelke will succeed outgoing CEO Brian Cornell effective February 1, 2026.
  • TJX posted better-than-expected results, with earnings per share of $1.10 on revenues of $14.4 billion.
  • Hertz announced a strategic partnership with Amazon Autos to sell pre-owned vehicles online in multiple cities, starting with Dallas, Houston, Los Angeles, and Seattle.
  • Home improvement retailer Lowe’s reported adjusted earnings per share of $4.33, beating expectations, on fiscal second-quarter net sales of $23.96 billion.
  • Shares of First Solar declined following President Trump’s announcement of stricter approval processes for wind and solar projects, citing the higher energy costs associated with renewables.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index declined this week.
  • The U.S. 10-year Treasury yield edged down to 4.328% and the yield on the 2-year note edged up to 785% over the week.
  • The U.S. Dollar Index appreciated to 98.82 this week.

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