InvestMacro

The US stock indices ended Thursday’s session with a notable decline amid a worsening macroeconomic backdrop and growing investor doubts about the profitability of large‑scale investments in artificial intelligence. By the end of the day, the Dow Jones Index (US30) fell by 0.97%. The S&P 500 Index (US500) declined by 1.21%. The tech‑heavy Nasdaq (US100) closed Wednesday in the red at 2.15%. Corporate earnings triggered massive sell‑offs: Alphabet shares fell by 6.9% due to a sharp upward revision of its capital‑expenditure projections, while Tesla shares plunged by 14.5% amid a drop in quarterly profit. The wave of selling also affected other giants, including Nvidia, Microsoft, Meta, Amazon, Broadcom, and Oracle.

Additional pressure on the market came from the macroeconomic and geopolitical backdrop. The escalation of the maritime blockade in the Middle East triggered a new spike in oil prices and a rise in Treasury yields, intensifying concerns about renewed inflationary pressure.

European indices closed Thursday lower. By the end of the day, Germany’s DAX (DE40) fell by 1.56%, France’s CAC 40 (FR40) closed down 1.64%, Spain’s IBEX 35 (ES35) declined by 1.55%, and the UK’s FTSE 100 (UK100) closed down 0.73%. The European Central Bank (ECB) kept interest rates unchanged as expected. The regulator noted that energy‑price expectations generally align with June estimates but warned that uncertainty remains high and that the full impact of the recent energy shock on inflation is still ahead. ECB leadership emphasized that it will continue monitoring the scale and consequences of this shock, while the ongoing conflict with Iran and the resulting rise in oil prices intensify inflation concerns.

Crude‑oil prices (WTI) on Thursday posted a powerful surge, rising more than 6% and surpassing $92 per barrel. Prices have been rising for five consecutive sessions, reaching their highest level since early June amid a sharp escalation of military conflict in the Middle East and the threat of large‑scale disruptions to global energy supplies. The new wave of tensions was triggered by strong statements from US President Donald Trump, who blamed Iran for Yemeni Houthi attacks on commercial vessels in the Red Sea. Washington threatened Tehran and the militants with a harsh military response, and the US leader announced that a large‑scale strike on Iran was under consideration. These threats followed Houthi attacks on two Saudi oil tankers as part of their declared blockade of Saudi ports.

The US natural‑gas prices (XNG) rose to $2.92 per MMBtu, reaching a two‑week high amid expectations of hotter‑than‑normal weather through August 7, which traditionally boosts electricity demand for air‑conditioning systems. However, the upside potential was limited by a fresh report from the US Energy Information Administration (EIA). According to the agency, gas inventories increased by 32 billion cubic feet in the week ending July 17, exceeding the five‑year average of 30 billion and remaining 6.4% above the five‑year norm, indicating sufficient supply in the market.

On Thursday, Japan’s Nikkei 225 (JP225) rose by 0.46%, China’s FTSE China A50 increased by 0.22%, Hong Kong’s Hang Seng (HK50) gained 1.28%, and Australia’s ASX 200 (AU200) closed up 0.18%. Asian stock markets on Friday posted a broad decline following a sharp sell‑off on Wall Street, triggered by investor doubts about the profitability of major AI‑related investments. The steepest drops were recorded in Japan and South Korea, where technology‑heavy indices came under serious pressure, particularly among major semiconductor manufacturers. An additional negative factor was the introduction by the US of new import tariffs of 10-12.5% on goods from most key trading partners, replacing the expiring global 10% tariff. This revived concerns about the outlook for global trade, despite the absence of retaliatory measures from Asian governments.

The Australian dollar (AUD) fell below $0.698 on Friday, heading toward its first weekly decline in a month amid global U.S. dollar strength, escalating geopolitical risks, and new trade barriers. The surge in Brent crude prices above $100 per barrel following Houthi attacks on tankers in the Red Sea and US President Donald Trump’s threats toward Iran sharply intensified inflation concerns. Additional pressure on markets came from the introduction of new US import tariffs against 60 partner countries, reinforcing investor expectations of a prolonged period of high interest rates worldwide.

The US equities ended Wednesday’s session lower amid investor caution ahead of the start of big‑tech earnings season. By the end of the day, the Dow Jones Index (US30) fell by 0.01%. The S&P 500 Index (US500) declined by 0.14%. The tech‑heavy Nasdaq (US100) closed Wednesday in the red at 0.57%. Software developers and major tech platforms came under the most pressure ahead of Alphabet’s earnings release (-1.5%): Microsoft shares fell by 1.9%, and Meta by 2.6%. Meanwhile, chipmakers managed to partially recover recent losses: Nvidia shares rose by 2.3%, Broadcom by 2.7%, and AMD by 1.4%.

European indices closed Wednesday with confident gains. By the end of the day, Germany’s DAX (DE40) rose by 0.58%, France’s CAC 40 (FR40) closed up 0.89%, Spain’s IBEX 35 (ES35) gained 0.99%, and the UK’s FTSE 100 (UK100) closed up 1.24%.

Palladium (XPD) prices consolidated above $1,200 per ounce, recovering after falling to nearly a one‑year low recorded at the end of June. The main driver of the rebound was steady demand for hybrid electric vehicles (HEVs): major automakers are actively implementing software‑defined technologies in hybrids, supporting high palladium consumption in catalytic converters.

Crude‑oil prices (WTI) on Wednesday tested a six‑week high at $88.6 per barrel before correcting to $86.5 under the influence of inventory data. Markets continue to price in significant risks to global supply due to the Middle East conflict, which is hindering fuel exports from Gulf countries. The situation is further inflamed by strong statements from US Secretary of State Rubio, who accused Tehran of violating commitments and demanded guarantees of shipping safety in the Strait of Hormuz, as well as Iran’s abandonment of nuclear ambitions and support for proxy groups. Additional concern among traders is caused by Houthi threats in the Red Sea.

On Wednesday, Japan’s Nikkei 225 (JP225) fell by 0.18%, China’s FTSE China A50 declined by 0.54%, Hong Kong’s Hang Seng (HK50) dropped by 0.95%, and Australia’s ASX 200 (AU200) closed up 0.34%. Asian stock markets on Thursday showed mostly upward dynamics, supported by a rally in the semiconductor sector. The driver for growth was statements from major US tech giants about plans to maintain high investment volumes in AI infrastructure. Market participants were encouraged by Alphabet’s massive capital‑expenditure plans, with the company intending to invest up to $205 billion this year, strengthening the outlook for regional chip and equipment suppliers.

The Australian dollar (AUD) strengthened above $0.70, reaching a five‑week high on the back of strong labor‑market data, which fueled expectations of further hawkish action from the Reserve Bank of Australia. In June, employment increased by 76,300 people – the largest gain since April last year and significantly above analyst expectations – while the unemployment rate remained at 4.4%, and labor‑force participation reached a yearly high of 67%.

Bank Indonesia (BI) unexpectedly kept its key interest rate unchanged at 5.75%, diverging from market expectations of a 25‑basis‑point hike. Recall that at the two previous meetings, the regulator consistently raised the rate to support the rupiah and attract capital, resulting in a cumulative increase of 100 basis points since May – the highest level since April 2025. The current decision to pause is explained by the desire to simultaneously contain external risks and support national economic growth. The macroeconomic backdrop at the time of the meeting was characterized by an acceleration of annual inflation in June to 3.34% from 3.08% in May, bringing the indicator close to the upper boundary of the regulator’s target range of 1.5%-3.5%.

The US stock indices ended Tuesday with confident gains, fully driven by a powerful rebound in the semiconductor sector. By the end of the day, the Dow Jones Index (US30) rose by 0.74%. The S&P 500 Index (US500) increased by 0.89%. The tech‑heavy Nasdaq (US100) closed Tuesday in the green at 1.93%. Against this backdrop, the “chip” segment became the leader of the rally: Micron shares surged by 12.2%, Sandisk by 14.3%, AMD by 8.1%, and Intel added 8.6% on news of upcoming staff reductions. Nvidia shares rose by 2% thanks to reports of deliveries of the latest chip models to clients. The market demonstrated this growth ahead of Alphabet’s quarterly report, from which investors expect key signals regarding investments in AI infrastructure, despite the fact that shares of the search giant fell by 1.4%.

Bitcoin rose to $66,000, reaching a five‑week high at the end of July. The driver of growth was the return of institutional optimism: US spot bitcoin ETFs recorded net inflows of $75.7 million last week. This is already the second consecutive week of inflows after nearly two months of continuous outflows, strengthening market hopes for the formation of a price bottom.

European indices closed Tuesday higher. By the end of the day, Germany’s DAX (DE40) rose by 0.66%, France’s CAC 40 (FR40) closed up 0.28%, Spain’s IBEX 35 (ES35) gained 0.90%, and the UK’s FTSE 100 (UK100) closed up 0.58%. The ongoing US strikes and the resulting rise in oil prices are forcing investors to price in two additional ECB rate hikes by December, including the almost fully priced‑in tightening in September. At the upcoming meeting this week, however, the regulator is expected to keep rates unchanged as it assesses the impact of the June hike.

Crude‑oil prices (WTI) continued their confident rise, increasing by 2.6% to around $84.7 per barrel and reaching their highest level since mid‑June. Prices have shown positive dynamics for the third consecutive session amid escalating US-Iran tensions, which have turned into a continuous series of strikes by Washington and harsh statements from US leadership following the deaths of American service members. Additional pressure on the energy market comes from new logistical incidents and threats to maritime transport. Reports of an attack on another oil tanker near the Strait of Hormuz and the blockade of Saudi shipping in the Red Sea announced by Yemen’s Houthis have already forced some tankers to change routes or turn back.

Palladium prices stabilized around $1,260 per ounce, correcting after recent gains amid escalating US-Iran tensions. The new wave of instability – reflected in statements by the Islamic Revolutionary Guard Corps about strikes on US targets and the Houthi‑announced maritime blockade of Saudi Arabia – triggered a jump in Brent crude prices to monthly highs and intensified overall inflation concerns. At the same time, further declines in palladium are limited by the fundamental factor of supply shortages, as South African producers continue to face high operating costs and rising electricity tariffs. Since the beginning of the year, palladium has remained down 22.81%.

On Tuesday, Japan’s Nikkei 225 (JP225) gained 3.26%, China’s FTSE China A50 rose by 2.41%, Hong Kong’s Hang Seng (HK50) fell by 0.04%, and Australia’s ASX 200 (AU200) closed Tuesday up 0.02%.

The New Zealand dollar (NZD) consolidated at 0.582, holding near a six‑week high amid persistent expectations of tight monetary policy. The release of Q2 inflation data – which accelerated to 4.1%, exceeding both market expectations and the Reserve Bank of New Zealand’s target range of 1-3% – continues to serve as the main driver for the national currency. Swap markets are pricing in the inevitability of a 25‑basis‑point rate hike in September, and also projecting continued tightening in October, December, and February.

Hong Kong’s annual inflation rate in May 2026 increased to 2.0% compared to 1.7% a month earlier, reaching its highest level since April of the previous year. On a monthly basis, consumer prices in June 2026 remained unchanged, maintaining zero dynamics for the second consecutive month.

The US stock indices started the week on a downbeat note. By the end of the day, the Dow Jones Index (US30) fell by 0.59%. The S&P 500 index (US500) declined by 0.19%. The tech‑heavy Nasdaq (US100) closed Monday in the red at 0.05%. Rising energy prices pushed Treasury yields higher, as market participants began pricing in a more likely Fed rate hike by year‑end due to inflation risks. As a result, traditional sectors came under pressure, including banking – where JPMorgan and Bank of America ended the session lower – as well as the industrial segment represented by Applied Materials. Against this backdrop, the technology sector, especially semiconductor manufacturers, showed signs of recovery after the recent sell‑off. Investors appear to be reassessing expectations regarding hyperscalers’ spending on AI infrastructure, allowing shares of Broadcom, Micron, AMD, and Intel to close higher. Notably, Alphabet shares rose 1.5% ahead of Wednesday’s important corporate‑guidance update, which could set the tone for the entire tech sector for the rest of the week.

The Canadian dollar (CAD) weakened to 1.41 per US dollar, correcting after recently reaching a one‑month high. The key pressure factor was the June inflation report, which showed annual inflation slowing to 2.8% from May’s 3.2%, below market expectations of 2.9%. The main contributor to this decline was slower fuel‑price growth, while core inflation indicators – the metrics closely watched by the Bank of Canada – fell to a five‑year low.

European indices closed Monday without a unified trend. By the end of the day, Germany’s DAX (DE40) rose by 0.06%, France’s CAC 40 (FR40) closed up 0.02%, Spain’s IBEX 35 (ES35) fell by 0.05%, and the UK’s FTSE 100 (UK100) closed down 0.71%. The main restraining factor remains rising geopolitical tension: the blockade of the Strait of Hormuz for LNG tankers triggered a new spike in natural‑gas prices in Europe, reigniting inflation concerns and forcing investors to revise ECB rate‑path expectations toward tightening. The most severe blow was taken by Ryanair, whose shares plunged 5.2% after the sharp rise in jet‑fuel prices negatively affected quarterly profit metrics, highlighting the airline’s direct vulnerability to the current energy crisis.

The oil market remains tense: prices WTI are holding at a five‑week high around $82 per barrel, as investors attempt to assess the reliability of diplomatic initiatives amid real threats to supply chains. Despite reports of a possible 10‑day ceasefire between the US and Iran, the market continues to react sharply to the Houthi‑initiated shipping blockade and actual disruptions to transportation through the Strait of Hormuz, preventing prices from declining significantly.
On Monday, Japan’s Nikkei 225 (JP225) was closed, China’s FTSE China A50 rose by 2.60%, Hong Kong’s Hang Seng (HK50) gained 2.36%, and Australia’s ASX 200 (AU200) closed down 0.06%.

The Australian dollar (AUD) strengthened to a four‑week high near $0.70, supported by global growth in energy‑related risks. The ongoing tenth consecutive day of conflict between the US and Iran, as well as the Houthi‑announced maritime embargo against Saudi Arabia, triggered a spike in oil prices. Amid the threat of large‑scale disruptions to energy supplies, inflation concerns intensified, prompting markets to price in an 80% probability of another rate hike by the Reserve Bank of Australia (RBA) by December, in addition to the already completed three‑step tightening cycle to 4.35%.

The New Zealand dollar (NZD) strengthened to $0.586, holding near a seven‑week high amid strong domestic data. Annual inflation in Q2 accelerated to 4.1%, exceeding both market projections and the expectations of the Reserve Bank of New Zealand (RBNZ), and significantly surpassing the target range of 1-3%. This reading was the highest since late 2023 and confirmed the need for further measures to cool the economy. In response to the inflation spike, swap markets are pricing in the inevitability of a rate hike in September, and also expecting additional tightening in October, December, and February next year.

The US stock indices ended Friday’s session in the red. By the end of the day, the Dow Jones Index (US30) fell by 0.77% (weekly: -1.01%). The S&P 500 Index (US500) declined by 1.01% (weekly: -1.19%). The tech‑heavy Nasdaq (US100) closed Friday in the red at 1.49% (weekly: -2.98%). The main driver of the sell‑off was the semiconductor sector, where investors began to doubt the sustainability of capital expenditures on AI infrastructure, additionally fearing competition from new Chinese developments such as Moonshot’s Kimi model. Shares of key industry players, including Nvidia, Broadcom, AMD, and Intel, posted solid declines, marking a correction after a significant rally earlier this year.

Preliminary University of Michigan data for July 2026 indicated a noticeable improvement in consumer sentiment, which rose to 54.4 points, significantly exceeding market expectations. Nevertheless, current sentiment levels remain 12% below last year’s readings, as overall inflationary pressure continues to burden household budgets.

Geopolitical and macroeconomic conditions continue to pressure market sentiment. Renewed tensions in the Middle East have triggered rising fuel prices, once again raising concerns about inflation risks. The situation is further complicated by political rhetoric: President Trump’s accusations against China regarding the 2020 election have undermined the stability of trade relations.

The Mexican peso (MXN) weakened to 17.52 per dollar, correcting after recent strengthening to 17.40 amid a global rise in risk aversion. Investors prefer the US dollar as a safe‑haven asset due to the escalation of the Middle East conflict. The situation for the national currency is further complicated by weak May industrial‑production figures, which showed a broad‑based decline, indicating signs of slowing economic activity in the country.

European indices closed Friday higher. By the end of the day, Germany’s DAX (DE40) fell by 0.34% (weekly: -0.53%), France’s CAC 40 (FR40) closed down 0.47% (weekly: +0.39%), Spain’s IBEX 35 (ES35) declined by 0.45% (weekly: -0.46%), and the UK’s FTSE 100 (UK100) closed up 0.27% (weekly: +0.97%). European stock indices ended Friday’s session with notable declines, reflecting global investor pessimism about the outlook for the artificial‑intelligence sector. As a result, shares of giants such as ASML and Siemens posted significant losses. Geopolitical tensions and rising natural‑gas prices created additional pressure on the banking sector, intensifying concerns about inflation risks and declining credit activity.

Crude‑oil prices (WTI) reached a monthly high, surpassing $84 per barrel amid rapid escalation of the Middle East conflict. Over the week, oil prices surged more than 14% after Iran’s retaliatory strikes on targets in Bahrain, Jordan, Kuwait, Oman, Qatar, and Syria in response to a series of US attacks. The situation is complicated by reports of damage to a power plant and desalination facility in Kuwait, as well as Tehran’s threats to deploy Houthi forces to block the Red Sea if strikes on Iranian energy infrastructure occur.

On Friday, Japan’s Nikkei 225 (JP225) fell sharply by 4.03% (weekly: -6.24%), China’s FTSE China A50 closed down 3.33% (weekly: -2.83%), Hong Kong’s Hang Seng (HK50) declined 1.78% (weekly: +1.67%), and Australia’s ASX 200 (AU200) closed down 0.50% (weekly: 0.0%).

Hong Kong’s labor market showed resilience in Q2 2026: the unemployment rate remained at a ten‑month low of 3.7%. Overall employment improved: an influx of labor resources increased total employment to 3.6 million people, while the number of unemployed decreased by 1,400.

The offshore yuan (CNY) on Monday held near 6.77 per dollar, staying close to weekly lows amid geopolitical instability and Beijing’s monetary decisions. Market sentiment remains highly sensitive to Middle East escalation: after new US airstrikes on Iran over the weekend, Tehran officially announced its withdrawal from the ceasefire with Washington, increasing global uncertainty. Domestically, the People’s Bank of China maintained stability, keeping the one‑year and five‑year Loan Prime Rates (LPR) at 3.0% and 3.5%, respectively. The regulator has kept them at record lows for 14 consecutive months despite mixed macroeconomic indicators in Q2.

The New Zealand (NZD) dollar shows confidence, reaching a six‑week high at $0.585. The main driver of growth is market expectations ahead of the upcoming CPI report. Projections indicate that annual inflation in Q2 may reach or exceed 4%, a two‑year high, largely due to rising fuel costs. Such an inflation spike virtually guarantees continued tightening by the Reserve Bank.