Global Markets Weekly Update

U.S.

Major U.S. stock indexes finished the week higher, though gains narrowed somewhat late in the week as inflation concerns, surging Treasury yields, and volatility around artificial intelligence (AI)-linked stocks tempered the early-week rally. The S&P 500 Index led the major benchmarks higher, gaining over 2.5%, while the Russell 2000 Index lagged but still added 1.32%.

AI-linked stocks generally contributed to the week's early gains, rebounding from the prior week's sell-off amid renewed optimism about investment in infrastructure and demand for computing capacity. Encouraging earnings commentary from AI cloud platform CoreWeave, strong revenue growth at Taiwan Semiconductor Manufacturing, and updates surrounding frontier AI lab Anthropic's highly anticipated initial public offering helped support sentiment. However, shares of NVIDIA came under pressure following reports concerning cofounder and Chief Executive Officer Jensen Huang's personal conduct, culminating in his resignation on Thursday. The developments weighed heavily on NVIDIA shares and appeared to contribute to broader volatility around AI-related segments late in the week.

Geopolitical developments also influenced sentiment, as signs of restraint and potential diplomatic progress between the U.S. and Iran helped push oil prices lower early in the week. However, optimism faded somewhat on Thursday after President Donald Trump said the U.S. no longer needs a deal with Iran, contributing to a rebound in crude prices.

Hot CPI lifts expectations for rate increase; producer prices mixed

The Bureau of Labor Statistics reported on Tuesday that its consumer price index (CPI) rose 0.4% month over month in October, slowing from September's 0.6% increase but exceeding consensus expectations for a 0.3% gain. Core CPI—which excludes volatile food and energy costs—rose 0.3%, unchanged from September and above estimates for a 0.2% increase.

The report appeared to reinforce expectations for additional monetary policy tightening at the Federal Reserve's December meeting. Several Fed officials emphasized the need to bring inflation closer to the central bank’s 2% target during the week, including Fed Governor Christopher Waller, who stated that a 50-basis-point rate increase could be appropriate in response to elevated inflation. As of Friday afternoon, data from the CME FedWatch Tool indicated that a December rate hike was fully priced in, with a roughly 10% probability of a larger, 50-basis-point move.

Meanwhile, Friday’s producer price index (PPI) report showed headline prices rose 0.3% in October, well below September’s 1.4% rise and a tick lower than consensus estimates. However, on an annual basis, headline PPI accelerated to 6.5% from 6.3% in the prior month, the fastest annual pace since November 2022. Core PPI rose 0.3% month over month, in line with expectations, and was up 5.0% from a year earlier.

Jobless claims remain low; existing home sales slip

Elsewhere, initial jobless claims totaled 200,000 for the week ended November 7, increasing from the prior week’s revised 191,000 but remaining relatively subdued; claims have been at or below 200,000 since early September. Separately, existing home sales fell to a seasonally adjusted annual rate of 3.75 million in October, down 5.5% from September’s reading and the slowest pace in over 16 years.

Treasury yields rise sharply amid inflation concerns and rate-hike expectations

U.S. Treasuries generated negative returns for the week, with yields rising sharply across most maturities in response to the week’s inflation data and hawkish Fed commentary. (Bond prices and yields move in opposite directions.) Short-term yields experienced particularly pronounced increases, with the two-year Treasury yield surging on Tuesday and again on Thursday. Demand at several Treasury auctions was also somewhat weaker than expected.

Europe

The pan-European STOXX Europe 600 Index ended 2.44% higher in local currency terms. European markets were shaped by a rotation into industrials, financials, and perceived defensive assets from U.S. technology and AI-related stocks. Largely resilient third-quarter corporate earnings, mostly robust macroeconomic data, and easing oil prices also supported European equities. Among major stock indexes, Germany’s DAX closed 3.60% higher, France’s CAC 40 Index rose 2.82%, and Italy’s FTSE MIB climbed 3.61%. The UK’s FTSE 100 Index gained 2.14%.

Eurozone economy grows in Q3

Eurozone gross domestic product (GDP) grew by 1.3% year on year in the third quarter of 2026—marginally stronger than the 1.2% recorded in the preceding three-month period. Among other regional macroeconomic data releases, Italy’s September industrial production rebounded 1.2% month on month, ahead of expectations, while French unemployment unexpectedly eased to 8.2%.

Mixed German economic data

Germany’s trade surplus narrowed sharply in September to EUR 15.6 billion, below expectations, as imports rose faster than exports. However, consumer price inflation in the country was confirmed at 2.8% in October, down from 3.3% in the preceding month.

Stronger-than-expected UK growth

GDP expanded 0.7% sequentially over the three months ended September 30, accelerating from the 0.5% logged in the previous quarter. Services and manufacturing were particularly robust. The resilient economy reinforced expectations that the Bank of England may need to raise rates again in December following last week’s hike.

Japan

Japan’s stock markets rose sharply over the week, with the Nikkei 225 Index gaining 6.46% and the broader TOPIX Index up 6.30%, outperforming the wider Asia-Pacific region as the yen weakened. The rally, which followed the previous week’s sell-off, was supported by a recovery in U.S. technology shares and easing geopolitical tensions, although momentum slowed later in the week on renewed unease over AI stocks. The impact on Japanese equities appeared contained by Friday, with the outlook for AI infrastructure demand still seen as positive.

Yen weakens

The yen slid to around JPY 160 against the U.S. dollar, from around JPY 158 at the end of the prior week, as hotter-than-expected U.S. inflation and hawkish comments from Federal Reserve officials strengthened expectations of a rate increase in December and lifted the dollar. The yen’s weakness prompted a warning on Thursday from Vice Finance Minister for International Affairs Atsushi Mimura that recent moves had been excessively rapid. He added that it was too early to forget what happened this summer, an apparent reference to Japan’s yen-buying interventions, including a joint operation with the U.S. in late July.

Rate hike expected in December

The yield on the 10-year Japanese government bond rose to 2.87% from 2.63% at the end of the previous week, tracking the rise in U.S. Treasury yields. Expectations for a Bank of Japan (BoJ) rate increase in December firmed, while the BoJ’s summary of opinions from its October meeting showed policymakers debating whether to accelerate rate increases. Board member Toichiro Asada said on Thursday that the next increase should be carefully timed, remarks seen as dovish.

In economic news, Japan’s corporate goods prices rose 7.1% year over year in October, above the 6.5% consensus and accelerating from 6.8% in September. In contrast, household spending fell 6.8% year over year in September, a much larger decline than expected and the steepest since 2020, even as wages have been rising.

China

Chinese equities declined during the week as late-week technology selling reversed earlier mainland gains, while Hong Kong suffered heavier losses amid weakness in internet platforms and AI developers. The CSI 300 Index fell 0.94%, the Shanghai Composite Index declined 0.41%, and the Hang Seng Index dropped 3.45% in local currency terms, according to FactSet.

The unexpected departure of NVIDIA's chief executive and concerns about potential tighter U.S. restrictions on advanced-chip access contributed to market volatility, although selected mainland semiconductor shares benefited from expectations of increased domestic demand. Strong export growth and an extension of the U.S.-China trade truce provided a more supportive economic backdrop, but subdued consumer inflation highlighted persistent weakness in domestic demand.

NVIDIA leadership change unsettles Chinese AI shares

Chinese AI model developers and export-focused data center equipment suppliers came under selling pressure on Friday following the resignation of NVIDIA Chief Executive Jensen Huang amid uncertainty surrounding the company's leadership and concerns about future access to advanced U.S. computing chips. By contrast, selected mainland semiconductor manufacturers gained earlier in the week as investors anticipated stronger demand for domestically produced alternatives. The divergent performance underscored differences in technology supply chain exposure and contributed to Hong Kong's relative underperformance.

Exports remain strong as Beijing extends U.S. trade truce

China's exports rose 35.2% year on year in October, easing from September's 36.3% increase, while imports surged 41.6%, narrowing the monthly trade surplus to USD 105.3 billion from USD 133.5 billion, according to customs data. Strong demand for AI-related technology products supported exports, while higher commodity prices contributed to import growth. Separately, Beijing extended the suspension of an additional 24% tariff on U.S. imports and certain other trade restrictions until January 2027, while retaining an additional 10% tariff and prolonging selected other trade-related suspensions.

Inflation divergence reinforces domestic demand concerns

China's consumer price inflation eased to 0.7% year on year in October from 0.9% in September, while producer price inflation accelerated to 5.7% from 5.0%, according to the National Bureau of Statistics. Higher energy costs contributed to rising factory-gate prices, contrasting with muted household demand. The People's Bank of China also reiterated its commitment to countercyclical policy support and expanding domestic demand in its third-quarter monetary policy report, without announcing new stimulus measures.

Other key markets

Indonesia

Vice president’s resignation raises stakes over succession and institutional direction

Vice President Gibran Rakabuming Raka resigned this week following an impeachment push over his educational credentials, removing a central figure in the alliance that helped bring President Prabowo Subianto to power. On Wednesday, 120 lawmakers signed a petition opening the way to impeachment proceedings, and Gibran formally delivered his resignation to parliamentary leaders on Thursday, when Prabowo publicly accepted it. Gibran described the move as voluntary and denied that his academic documents were the reason. He and former President Joko Widodo both reiterated their support for Prabowo, and Gibran said he would not become an opposition figure. On Friday, People’s Consultative Assembly Speaker Ahmad Muzani announced that the assembly would elect a replacement on December 2. Prabowo will nominate two candidates, whose credentials will be reviewed by a 36-member team, but no names have been announced.

Brazil

Fiscal package advances in Senate as central bank signals patience

The Central Bank of Brazil’s Monetary Policy Committee (COPOM) published minutes on Tuesday explaining its decision to hold the Selic rate at 13.75% at the November 3 to 4 meeting. The minutes emphasized a sharper slowdown in economic activity and argued that below-potential growth could limit second-round effects from supply shocks, including oil prices, weather, labor costs, and currency depreciation. Markets interpreted the minutes as dovish relative to expectations of renewed tightening, although COPOM did not rule out hikes and said it would respond firmly if persistent second-round effects emerged. The Brazilian real weakened over the week. Higher-than-expected U.S. inflation and renewed expectations of Federal Reserve tightening also pressured emerging market currencies.

The government introduced Complementary Bill 299/2026—the bill Brazil’s government sent to Congress to help it hit its budget targets in 2027—on Wednesday, and the Senate approved the amended main text 45–31 on Thursday. The package combines spending restraint, higher cash revenues, and greater budget flexibility, including authority to lower the real growth ceiling on key spending, further reductions in tax benefits, and limits on the use of tax credits. The package is not yet enacted. Four contested amendments are scheduled for Senate votes on November 17, and the Chamber of Deputies must still consider the bill. Attention now turns to President Luiz Inácio Lula da Silva’s decision on a finance minister and on a possible second round of spending reforms after he returns from travel next week.