7th September 2026

U.S.

Stock Market Performance:

• U.S. equities finished narrowly mixed as investors weighed renewed U.S.-Iran hostilities, higher oil prices, stronger employment data and changing Federal Reserve rate expectations.

• The Dow Jones Industrial Average fell 0.27%, while the Nasdaq Composite gained 0.40%. The S&P 500, Russell 2000 and S&P MidCap 400 were little changed.

• Growth stocks outperformed value stocks by the widest margin in a month, while the S&P 500 energy sector led as oil prices increased.

Oil Prices and Treasury Yields Rise Amid U.S.-Iran Hostilities:

• Renewed U.S.-Iran strikes near the Strait of Hormuz pushed oil prices sharply higher early in the week, reviving concerns over energy supply disruptions, inflation and the Federal Reserve’s rate outlook.

• The 10-year U.S. Treasury yield reached approximately 4.82% intraday on Wednesday before easing following comments from Fed Governor Christopher Waller that rates could remain unchanged if disinflation continued.

• Treasury yields subsequently resumed their rise after stronger-than-expected employment data increased expectations of a potential near-term rate hike.

August Job Growth Beats Expectations:

• U.S. employers added 162,000 jobs in August, well above expectations of around 55,000, while July’s increase was revised higher to 21,000 and June was also revised upwards.

• The unemployment rate remained at 4.1%, while labour force participation increased to 61.6% from 61.4%.

• Other labour indicators were mixed, with job openings rising to 7.27 million in July from 7.18 million but below expectations of 7.35 million.

• ADP reported only 38,000 private-sector jobs added in August, the lowest monthly increase since January, while initial jobless claims were broadly unchanged at 206,000.

PMI Surveys Show Resilient Activity and Persistent Price Pressures:

• The ISM manufacturing PMI fell to 54.6 in August from 55.6 but remained above 50 for an eighth consecutive month, with new orders, production and employment still expanding.

• The manufacturing prices index remained elevated at 71.1, indicating that raw material prices had increased for the 23rd consecutive month.

• The ISM services PMI rose 1.3 points to 55.4, with new orders and backlogs improving, although prices paid reached their highest level in four years.

Europe

Stock Market Performance:

• The STOXX Europe 600 declined 0.81% as higher energy prices, renewed Middle East tensions and rising bond yields weighed on sentiment, although technology stocks benefited from renewed AI enthusiasm.

• Germany’s DAX fell 1.97%, France’s CAC 40 declined 1.46% and Italy’s FTSE MIB lost 0.98%, while the UK’s FTSE 100 was broadly flat.

• Markets recovered some ground later in the week as oil prices and bond yields eased.

Middle East Tensions Push Energy Prices Higher:

• Renewed U.S.-Iran hostilities and attacks on oil tankers in the Strait of Hormuz raised concerns over global energy supplies, pushing Brent crude and European natural gas prices higher.

• Energy stocks remained relatively resilient, while higher fuel costs pressured economically sensitive sectors.

Higher Energy Prices Pressure Bond Markets:

• Rising energy prices increased concerns that inflation could remain elevated for longer, pushing German government bond and UK gilt yields higher.

• Higher yields weighed particularly on growth stocks, consumer sectors and other rate-sensitive areas before sentiment improved later in the week.

European Economic Data:

• Eurozone retail sales fell 0.6% month on month in July, the sharpest decline since May 2025, with Germany, Spain and Italy recording falls while France and the Netherlands increased.

• Eurozone producer prices rose 1.6% in July, significantly above expectations, largely reflecting higher energy costs, while capital goods prices increased 0.3% and nondurable consumer goods prices declined.

UK Markets Contend with Fiscal and Rate Concerns:

• UK equities faced additional pressure from domestic fiscal uncertainty, with reports of potential windfall taxes on banks and energy companies weighing on financial stocks.

• UK new car registrations rose 13.7% year on year in August, marking the ninth consecutive month of growth.

Japan

Stock Market Performance:

• Japanese equities declined as rising government bond yields and expectations of a near-term Bank of Japan rate increase pressured highly valued growth stocks.

• The Nikkei 225 fell 2.09%, while the TOPIX declined 1.05%.

• A stronger yen and renewed U.S.-Iran tensions also weighed on exporters and broader sentiment, although technology shares recovered towards the end of the week.

JGB Yield Reaches Highest Level Since 1996:

• The 10-year JGB yield briefly exceeded 3.0%, its highest level since 1996, amid expectations that the Bank of Japan could raise rates at its 17–18 September meeting.

• Higher oil prices, concerns over Japan’s fiscal outlook and the global bond sell-off contributed to the rise, although the yield subsequently eased to around 2.9%.

Yen Strengthens as BoJ Rate Expectations Increase:

• The yen strengthened to around JPY 156 against the U.S. dollar on Friday, compared with approximately JPY 159 the previous week, as expectations of a near-term BoJ rate hike increased.

• Markets largely attributed the move to changing rate expectations rather than official intervention, although Finance Minister Satsuki Katayama reiterated that authorities remained vigilant.

Household Spending Weakens:

• Japanese household spending fell 3.6% year on year in July, significantly worse than the expected 1.6% decline and following a 3.3% fall in June.

• Spending on food, utilities, transport and communications declined, highlighting continued weakness in consumer demand.

• Industrial output provided a positive contrast, rising 4.1% year on year in July following a 4.9% increase in June.

China

Stock Market Performance:

• Chinese equities were mixed as weaker momentum in AI-related shares pressured mainland markets, while Hong Kong equities rallied late in the week.

• The CSI 300 fell 1.33% and the Shanghai Composite declined 0.56%, while the Hang Seng gained 0.26%.

• Rising oil prices and global bond yields weighed on semiconductor and AI-related growth stocks, while consumer staples, agriculture and media performed relatively better.

• Hong Kong stocks rose 1.74% on Friday, led by technology, consumer and property shares, after comments from Fed Governor Christopher Waller eased concerns over a near-term U.S. rate increase.

China Tightens Property Presale Rules:

• New measures require residential projects generally to reach the top-out stage before presales can begin, while mortgages on presold homes will only be released after project completion is registered.

• Development-loan maturities will be extended and the maximum term for personal housing loans increased from 30 to 40 years.

• Property shares initially fell sharply on concerns over developers’ cash flows, particularly among smaller developers, before recovering later in the week.

Business Surveys Show an Uneven Recovery:

• China’s official manufacturing PMI improved to 49.8 in August from 49.2 but remained below 50 for a second month, while the non-manufacturing PMI stayed at 49.0, its lowest level since December 2022.

• The private RatingDog manufacturing PMI increased to 51.5 from 50.9, while services rose to 51.4 from 50.4 and the composite PMI increased to 52.1 from 50.8.

• The divergence between official and private surveys suggested improving activity in parts of the economy but no decisive acceleration in overall growth.

Other Key Markets

Brazil:

• Brazil’s economy expanded more than expected in the second quarter, although high interest rates continued to weigh on domestic activity and growth momentum.

• Economists expect growth to slow further as restrictive monetary conditions increasingly affect households and businesses.

• Political uncertainty increased as opinion polls suggested President Luiz Inácio Lula da Silva’s advantage ahead of the 2026 presidential election had narrowed.

• Investors remain focused on the potential direction of fiscal policy and concerns over public finances and the next administration’s commitment to fiscal discipline.

Senegal:

• Senegalese international bonds fell sharply after the government reached a preliminary agreement for a new IMF programme and announced plans to restructure its debt.

• Investors remain concerned about potential losses for international bondholders and the treatment of upcoming debt payments.

• The proposed three-year IMF financing package is worth approximately USD 2.2 billion and follows the discovery in 2024 of billions of dollars of previously undisclosed government borrowing.

• Senegal’s debt is now estimated at well above 100% of GDP, while deteriorating market access has increased pressure for restructuring.

• The government plans to pursue an enhanced version of the G20 Common Framework, while excluding CFA franc-denominated domestic obligations and placing greater adjustment on international debt holders.

PLEASE NOTE:

This content is for informational purposes only and should not be construed as investment advice or a specific recommendation to act on any investment. It is importnat to assess your own circumstances before making investment decisions. The views expressed are as of the date indicated and whilst we believe the information is from reliable sources, we do not guarantee it’s accuracy. Past performance is not indicative of future results, and all investments carry market risks, including the potential loss of the principal.