After a week of volatile trading, major U.S. stock indexes closed higher on Friday, buoyed by solid economic data showing that U.S. business activity grew at its fastest pace in more than four years,with the Dow Jones Industrial Average rising about 1% and the Nasdaq ending its five-day losing streak; however, U.S. stocks still posted weekly losses as investors remained unsettled by volatility in U.S. Treasury yields and uncertainty surrounding the situation in the Middle East.
After global bond markets experienced a round of sharp volatility triggered by inflation concerns and fiscal spending, U.S. authorities intervened to curb long-term borrowing costs. The market is awaiting the new fiscal consolidation plan promised by U.S. Treasury Secretary Bessent.Strategists believe long-term bond yields will stabilize in the short term, but warn that if the U.S. Treasury market plan falls through, it could weigh on the dollar and prompt a flight from risk assets.
Crude oil futures rose for the sixth consecutive day after U.S. President Trump threatened to impose economic sanctions on Iran’s trading partners, heightening expectations of tight supply and fueling inflation concerns.This week, Brent crude futures rose 6.39%, while U.S. crude futures gained 5.66%.
Driven by multiple factors—including concerns over U.S. debt sustainability, a weaker dollar, and the U.S. Treasury’s unexpected expansion of its long-term Treasury repurchase program—spot gold prices broke strongly above $4,600 per ounce this week, marking their third consecutive week of gains.Gold opened near $4,381 at the start of the week. On Wednesday, after the Treasury announced it would double the scale of its repurchases of 10- to 30-year U.S. Treasuries, the price quickly broke through the $4,500 mark,and subsequently reached a weekly high of $4,632.14 on Friday, driven by dovish signals from the Fed’s July meeting minutes and ongoing fiscal concerns.
With the Jackson Hole Global Central Bank Symposium approaching next week, investors remain highly vigilant for any policy signals that Fed Chair Wash may send, as his remarks could affect the current fragile market balance.U.S. data to be released next week includes the July Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred measure of inflation.
Meanwhile, next week’s earnings report from Nvidia is seen as a potential catalyst for the S&P 500 to break through the 8,000-point mark, but tech stocks have come under significant pressure this week, with the semiconductor sector falling more than 4% over the past week.
Investors must remain highly vigilant to navigate the underlying market currents created by the interplay of multiple factors—especially as turmoil in the bond market has finally begun to spill over into the stock market.