Global Markets Weekly: Oil Prices Rise Amid Middle East Tensions

This week saw significant movements in global markets driven by geopolitical tensions in the Middle East, robust U.S. job gains, and various economic indicators influencing investor sentiment across regions.

United States

• Market Indexes Changes:
  • Dow Jones Industrial Average: 42,352.75, up 39.75 points, 12.37% YTD
  • S&P 500: 5,751.07, up 12.90 points, 20.57% YTD
  • Nasdaq Composite: 18,137.85, up 18.26 points, 20.83% YTD
  • S&P MidCap 400: 3,118.26, down 0.98 points, 12.11% YTD
  • Russell 2000: 2,212.80, down 11.91 points, 9.16% YTD
• Surprising Job Gains: U.S. stocks rallied, achieving a fourth consecutive weekly gain despite Middle East tensions. The Labor Department reported 254,000 new jobs in September, surpassing expectations. The unemployment rate dropped to 4.1%.
• Economic Indicators:
  • Average hourly earnings increased by 0.4% in September.
  • The ISM services index rose to 54.9, indicating strong sector growth.
  • Manufacturing jobs declined for the fifth time in 2024.
• Bond Market Reaction: The 10-year U.S. Treasury yield spiked to 3.98%, its highest since August, following the jobs report.

Europe

• Market Performance: The STOXX Europe 600 Index fell 1.80% amid Middle East tensions. Italy’s FTSE MIB, France’s CAC 40, and Germany’s DAX also saw declines.
• ECB Rate Cut Expectations: Slowing growth and inflation in the eurozone have increased expectations for an ECB rate cut in October. Eurozone inflation dropped to 1.8% in September.
• ECB and BoE Policy Signals: ECB officials hinted at possible rate cuts. BoE Governor Bailey suggested potential policy easing, while Chief Economist Huw Pill remained cautious.

Japan

• Market Reaction to Political Changes: Japan’s Nikkei 225 and TOPIX Indexes declined following Shigeru Ishiba’s election as Prime Minister, though markets later recovered some losses.
• Monetary Policy Stance: Ishiba indicated continuity in economic policies and emphasized the need for monetary easing to combat deflation.

China

• Market Gains: Chinese stocks surged, with the Shanghai Composite and CSI 300 Indexes posting significant gains, driven by optimism over government support measures.
• Economic Data: The official manufacturing PMI rose slightly but remained in contraction. The nonmanufacturing PMI fell to a 21-month low.
• Real Estate Market: Major cities relaxed homebuying restrictions, boosting market sentiment.

Other Key Markets

• Poland: Inflation remained elevated at 4.9% in September, with expectations for high rates until summer 2025.
• Türkiye: Inflation dropped to 49.5% in September, below the central bank’s interest rate. Tight monetary policy is expected to continue through year-end.