It’s been a relatively volatile week for markets. Global equities ended roughly flat, after a rollercoaster few days of trade tensions, banking concerns, and renewed optimism around AI and interest rates.
A rocky start to the week
Last Friday’s surprise announcement from Donald Trump that 100% tariffs on Chinese imports could arrive in November triggered an immediate sell-off, erasing some of the previous week’s gains.
This week, those US–China trade tensions continued to weigh on riskier assets such as equities, oil, and crypto, particularly in the first half of the week.
Adding to the unease, two US regional banks revealed suspected fraud in some of their large loans, reigniting fears about the stability of the US lending market. The news rattled investors and led to another dip in US stocks on Thursday. However, the uncertainty saw investors move towards perceived safe havens, pushing gold to an all-time high above $4,300 an ounce.
Positivity elsewhere as earnings season kicks off
Despite the early setbacks, the second half of the week brought brighter news. The US earnings season kicked off on a positive note, with Morgan Stanley and Bank of America both reporting solid results.
Meanwhile, ASML, a key player in the AI supply chain, announced strong demand for its most advanced chipmaking machines, reinforcing the narrative of continued growth in artificial intelligence investment.
On the monetary policy front, Federal Reserve Chair Jerome Powell’s comments suggested the central bank remains on track for potential rate cuts in October and December, thanks to signs of labour market weakness. This helped stabilise sentiment and offered some relief to equity markets.
By Friday afternoon, most major indices were set to close the week broadly flat or slightly lower, reflecting a tug of war between optimism over earnings and AI demand, and concerns about global trade and US banking stability.
For investors, this week was a reminder that market sentiment can shift quickly. Diversification across asset classes — including exposure to both growth sectors like technology and defensive assets such as bonds or gold — remains key to weathering short-term volatility.
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