Global markets weekly: Fed, inflation and rate decisions drive market moves

US stock market sentiment improved as easing crude oil prices and softer U.S. Treasury yields helped offset hawkish signals from the Federal Reserve, which raised interest rates by 25 basis points to a target range of 3.75%–4.00% while leaving the door open for another rate hike later this year.

Meanwhile, Saudi Arabia shut a key pipeline following drone attacks and postponed talks with Gulf states.

For the week, the S&P 500 (SP500) and Nasdaq COMP rose 0.7% and 2.6%, while Dow DJI shed 733 points.

Across the Atlantic, the European equities SXXP ended the week 0.3% lower.

On the data front, Eurozone inflation accelerated in August, reaching a multi-year high but coming in slightly below the initial estimate.

UK retail sales rebounded in August, outperforming expectations, while annual inflation rose to a five-month high.

The Bank of England held interest rates steady at 3.75% as surging energy prices fuelled fresh inflation concerns.

In the week, London’s FTSE 100 UKX ended the week flat while Germany DAX and France CAC markets slipped 0.9% and 0.7%, respectively.

Major corporate news from Europe this week:

• Volkswagen VWAGY anticipates more than 4,000 additional job cuts at its sports car subsidiary ​Porsche POAHY as part of a massive restructuring drive.
• Ferrari RACE said its wholly owned Italian subsidiary Ferrari S.p.A. has signed a partnership agreement with Rakuten Group RKUNY, with the deal set to take effect on January 1, 2027.

The Asia-Pacific markets

China’s retail sales growth weakened in August, falling short of expectations.

In the last week, Chinese markets 000001 rose 0.6%, while Japan’s Nikkei 225 JPN225 rose 2.6%.

Japan’s headline inflation remained steady, staying near its highest level since late 2025.

The Bank of Japan raised its key interest rate as expected, bringing the policy rate to its highest level in decades.