Weekly Market Movers — Key Highlights
  • Global equities recovered despite escalating U.S.-Iran tensions and oil price volatility.
  • Rate pause expectations boosted investor confidence and triggered a broad market rally.
  • Technology and AI leaders drove gains, led by strong results from Dell and Snowflake.
  • Treasury yields retreated after policymakers signalled a more measured policy stance.

Global equity markets demonstrated resilience during the week, recovering from an early risk-off sell-off driven by heightened geopolitical tensions in the Middle East, rising bond yields, and concerns over renewed inflationary pressures. Sentiment improved markedly later in the week as Treasury yields retreated from recent highs and investors took comfort from indications that policymakers may refrain from additional near-term monetary tightening, supporting a broad-based recovery across both developed and emerging markets. Technology and other growth-oriented sectors led gains, while a weaker U.S. dollar and improving risk appetite helped fuel a synchronized advance across international equities, allowing markets to finish the week modestly higher despite ongoing macroeconomic and geopolitical uncertainties.

In global geopolitics, escalating military exchanges between the United States and Iran heightened concerns over potential disruptions to oil supplies through the Strait of Hormuz. The resulting surge in crude oil prices reignited inflation fears and pushed global bond yields sharply higher, weighing on risk sentiment. U.S.-China tensions remained elevated after China imposed export controls on 10 U.S. firms in response to the Pentagon’s decision to add several major Chinese companies, including technology groups, to its military-linked entity list. Investors also monitored the approaching 30 September U.S. government funding deadline. In Europe, Italy announced a further 15-day extension of border controls with Spain amid ongoing tensions related to the Ceuta migration crisis, underscoring broader political and immigration challenges across the region.

Global Updates
  • The MSCI All Country World advanced over the week, recovering from an early bout of risk aversion as investors looked beyond geopolitical tensions and higher bond yields. Strong technology earnings, optimism around AI-related spending, and resilient corporate fundamentals supported risk appetite, helping global equities regain momentum.
  • The S&P ‌Global Japan Manufacturing Purchasing Managers’ Index (PMI) rose to 54.9 in August from 54.5 in July, its highest since April.
  • Ares Management’s real estate unit raised $4 billion for its fifth Japan logistics fund, marking its largest institutional fundraising.
  • Sony and Warner Music sued Anthropic, alleging copyrighted songs were used without permission to train Claude AI.
  • Britain’s third-largest airline Jet2 reported higher summer bookings year over year and increased fuel hedging as Middle East tensions pushed aviation fuel costs higher.
  • Russian President Vladimir Putin said a Ukraine peace agreement remains possible, with U.S. mediators set to visit Moscow and Kyiv.
  • Norwegian authorities seized a Russian cruise ship in the Arctic as Naftogaz seeks to enforce a $4.22 billion compensation award linked to Crimea.
  • Turkish authorities continued searching for 10 missing crew members after a cargo ship sank off Istanbul following a vessel collision.
  • Iran warned the U.S. it would respond forcefully to any Israeli offensive targeting Iranian and Hezbollah positions in southern Lebanon.
  • France announced more than €1 billion in aid for farmers after record heatwaves and droughts damaged crops, pastures, and water supplies.
  • Chinese authorities arrested 52 Singaporeans in Guangxi during a crackdown on alleged pyramid scheme activities and related offences.
U.S. Equity
  • U.S. equity markets ended the volatile week moderately higher, supported by a resilient back-to-back relief rally following an initial risk-off tone earlier in the week. Rising global bond yields and heightened geopolitical tensions in the Middle East weighed on sentiment at the start of the period, but markets rebounded as Treasury yields retreated from recent highs and risk appetite improved. Technology and other growth-oriented shares led the advance, while positive sentiment was further reinforced by Federal Reserve Governor Christopher Waller’s comments supporting a steady policy stance, helping ease investor concerns over aggressive near-term interest rate hikes.
  • U.S. Treasury yields surged to their highest levels since late 2023 as intensifying Middle East conflicts sparked fears of a renewed energy-driven spike in inflation. This spike forced fixed-income investors to dramatically reassess the path of monetary policy, pricing in a higher-for-longer interest rate trajectory and the growing prospect of additional Federal Reserve tightening. However, New York Fed President John Williams stated that the recent rise in bond yields reflected stronger economic prospects rather than market dysfunction, influencing interest-rate expectations
  • Federal Reserve Governor Christopher Waller indicated a willingness to support holding rates steady at the September FOMC meeting, triggering a decline in Treasury yields and a broad equity market rally.
  • The U.S. labor market displayed signs of cooling with the ADP National Employment Report indicating private employers added a lower-than-expected 38,000 jobs in August. This reinforced the signals of a broader deceleration in hiring.
  • The ISM Services Index rose to 55.4 in August, exceeding expectations and signalling continued strength in the U.S. services sector.
  • Oil prices rose earlier in the week amid disruptions and security concerns surrounding the Strait of Hormuz. Energy security anxieties eased slightly after U.S. Energy Secretary Chris Wright reported that a wartime record of over 17 million barrels of oil transited the Strait of Hormuz. This significantly calmed market fears of severe global supply disruption.
  • Dell Technologies stock rallied after reporting better-than-expected second quarter record revenues of $47.0 billion and an adjusted EPS of $7.04 and raising its fiscal 2027 full-year sales guidance to $192 billion on the basis of  an AI server backlog of $95 billion, boosting sentiment toward AI-related infrastructure spending.
  • Data-cloud company Snowflake’s share price jumped after the company delivered stronger-than-expected adjusted EPS of $0.62 on $1.55 billion in second-quarter revenue and issued robust forward full-year guidance of $6.07 billion.
  • Broadcom stock dragged after the company issued a softer-than-expected fourth-quarter revenue guidance of $34.8 billion, which overshadowed the fiscal third-quarter print revenue rising 86% year-over-year to $29.59 billion and more than 200% growth in AI chips.
  • Shares of Meta Platforms rose following the launch of its Muse Spark 1.3 artificial intelligence model, supporting broader enthusiasm for AI-related companies.
  • Shares of Uber Technologies rose, after Uber announced a restructuring plan to eliminate approximately 3,300 corporate jobs, representing 10% of its global workforce.
Fixed Income
  • The Bloomberg U.S. Aggregate Bond Index edged lower over the week. 
  • The U.S. 10-year Treasury yield rose to 4.756% and the yield on the 2-year note rose slightly to 4.333% over the week.
  • The U.S. Dollar Index declined slightly to 99.00 over the week.