USA

The U.S. economy showed signs of cooling during the week. July’s ISM Manufacturing PMI remained in contraction territory at 48.0, while the ISM Services PMI slowed sharply to 50.1, indicating that the services sector was barely expanding. Weekly initial jobless claims rose to 226,000 for the week ending August 2, the highest in over a month, suggesting some softening in labor market conditions. Inflation data for July was scheduled for release on August 12, with consensus expectations pointing to a modest monthly increase of 0.2–0.3% and annual inflation near 2.8%, driven partly by tariff-related price pressures. Equity markets gained despite mixed data, with the S&P 500 rising 2.4%, the NASDAQ climbing 3.9% to a record close, and the Dow Jones up 1.3%, as investors bet on eventual Federal Reserve rate cuts and reacted positively to strong corporate earnings in select sectors.

Europe

Economic growth remained sluggish, but inflation held at target. Eurostat’s flash estimate showed Euro Area GDP growing just 0.1% quarter-on-quarter in Q2, with the broader EU at 0.2%, underscoring the fragile recovery. Annual inflation was steady at 2.0% in July, in line with the European Central Bank’s target, leaving policymakers in a wait-and-see mode. Earnings season delivered mixed results, though bank stocks provided support, while exporters faced headwinds from a stronger euro and lingering trade uncertainties. Geopolitical developments, including speculation about potential Ukraine ceasefire talks, helped lift sentiment. The STOXX Europe 600 posted its largest weekly gain in nearly three months, up 2.2%, with the FTSE 100, DAX 40, CAC 40, and IBEX 35 all closing higher on the week.

Japan

Japanese equities outperformed their global peers, driven by strong earnings and easing trade policy concerns. Reports of U.S.–Japan tariff adjustments improved investor sentiment toward exporters, while major companies such as SoftBank and Sony delivered better-than-expected quarterly results. The TOPIX broke above the 3,000 mark for the first time in history, closing the week at a record high, while the Nikkei 225 also advanced strongly toward new peaks. Supportive currency conditions, moderate inflation running near 3–3.5%, and the Bank of Japan’s accommodative stance further bolstered risk appetite. Gains were concentrated in technology, industrials, and auto manufacturers, reflecting improved export visibility and upbeat forward guidance from corporates.

China

Economic data highlighted persistent headwinds in manufacturing and a tentative recovery in services. The official NBS Manufacturing PMI fell to 49.3 in July, while the S&P Global Manufacturing PMI (formerly Caixin) slipped to 49.5, both indicating contraction in factory activity. The Non-Manufacturing PMI eased to 50.1, signaling marginal expansion in the services sector. Investor sentiment remained subdued amid ongoing weakness in the property market, soft external demand, and regulatory uncertainties. Mainland equities traded narrowly lower, while the Hang Seng Index underperformed regional peers with a notable weekly decline. Policy support pledges from authorities helped limit losses but did not trigger a meaningful rebound, as markets awaited fresh catalysts from global inflation and trade developments.