USA
The US stock market closed on a positive note last week, driven by optimism surrounding economic resilience and investor confidence in corporate earnings. The S&P 500 rose by 1.23%, the NASDAQ gained 1.49%, and the Dow Jones Industrial Average advanced by 1.06%. The major indexes rallied strongly following the Federal Reserve's half-point interest rate cut. Although the Fed has hinted at the possibility of another rate hike this year, markets largely interpreted recent data as a sign that inflation is moderating. August’s Consumer Price Index (CPI) rose by 3.7%, but core inflation showed signs of slowing, which reassured investors that inflationary pressures might ease without requiring aggressive monetary tightening. Retail sales data also came in stronger than expected, signaling that consumers continue to spend despite higher interest rates, boosting sectors like consumer discretionary. In conclusion, while concerns over inflation and interest rates persist, the market’s positive close reflects growing confidence in the economy’s resilience and the prospect of a soft landing as the Fed approaches the end of its rate-hiking cycle.
Europe
Major indices across Europe posted mixed results. The Stoxx 600 rose by 0.07%, with broad-based gains across sectors. The FTSE 100 in the UK dropped by 0.59%, while the DAX 40 in Germany gained 0.98%, as industrials and export-oriented companies benefited from a weaker euro. The CAC 40 in France increased by 0.38%, driven by strong retail and luxury goods stocks. Although the European Central Bank (ECB) kept interest rates steady after a series of hikes, signals that future rate increases may be limited boosted investor optimism. The ECB emphasized that inflation was cooling in key areas, even as energy prices remained volatile. Inflation across the Eurozone showed signs of stabilizing. The region’s core inflation rate remained steady at 5.3%, unchanged from the previous month, while headline inflation edged down slightly, supporting hopes that further tightening by the ECB may not be necessary. A weaker euro, which slipped by 0.5% against the US dollar, helped improve the competitiveness of European exporters, particularly in Germany, lifting the DAX and industrial stocks. In summary, last week’s mixed performance in European stocks reflects growing confidence in economic resilience and the potential for a more moderate monetary tightening cycle, with strong corporate earnings providing further support.
Japan
The Japanese stock market posted strong gains last week, driven by a weaker yen, resilient corporate earnings, and positive global market sentiment. The Nikkei 225 surged by 3.12%, while the Topix gained 2.77%. Japan’s inflation data remained above the central bank's 2% target, with the Consumer Price Index (CPI) increasing by 3.1% in August. Despite this, the Bank of Japan (BOJ) maintained its ultra-loose monetary policy, signaling continued support for economic growth. This reassured investors, encouraging more risk-taking in equities. Looking ahead, the Japanese market may continue to benefit from a favorable economic environment, supported by the BOJ’s accommodative stance and a weak yen. However, risks related to global inflationary pressures and potential currency interventions by the Japanese government could introduce volatility in the coming weeks.
China
Last week, China's stock market performed positively, with significant gains driven by government stimulus and improving investor sentiment. The Shanghai Composite Index rose by 0.72%, supported by a recovery in financial and industrial stocks. The Hang Seng Index in Hong Kong surged by 4.8%, fueled by a strong rebound in technology and real estate sectors. Investor sentiment was buoyed by additional stimulus measures announced by the Chinese government. Efforts to stabilize the economy, including support for the property sector and infrastructure spending, helped boost confidence. Investors were encouraged by the government's proactive approach to countering weak economic growth. The technology sector in Hong Kong led the rally, with major players like Alibaba and Tencent posting significant gains as concerns over regulatory pressures eased. Additionally, the property sector saw a notable rebound following government measures aimed at reducing financial stress on developers, which helped restore some market confidence. While some data earlier in the month had raised concerns, the latest indicators showed slight improvements in industrial production and retail sales. This contributed to renewed optimism that the economy might be stabilizing after months of sluggish performance.