While regional tensions in the Middle East and the conflict between Russia and Ukraine continue to fuel concerns over energy supplies, economic talks between the United States and China brought optimism to the start of the week in global markets. Despite hawkish expectations regarding the Federal Reserve’s interest-rate policy, diplomatic activity ahead of the United Nations Summit supported risk appetite.
Rising fuel prices continued to put pressure on growth and inflation expectations, while higher energy costs strengthened hawkish expectations regarding the Fed’s monetary policy. The Fed raised interest rates last week for the first time since July 2023. Market pricing has increasingly pointed to the possibility of another rate hike by the end of the year, while statements from numerous Fed officials will be closely watched this week.
Diplomacy hopes push oil prices lower
Several meetings at the leaders’ level, particularly between the United States and China, are expected to take place at the U.N. Summit in the United States. Expectations that these contacts could produce positive results and reduce geopolitical risks contributed to oil prices starting the week lower.
The decline in oil prices eased inflation concerns to some extent and increased demand for riskier assets. Analysts say that a reduction in problems related to oil supplies could make the economic outlook and central banks’ policy paths more predictable.
Notification mechanism proposed at U.S.-China talks in New York
Ahead of Chinese President Xi Jinping’s expected visit to the United States, U.S. and Chinese delegations discussed economic and trade issues in New York. The U.S. delegation was led by Treasury Secretary Scott Bessent, while China’s delegation was headed by Vice Premier He Lifeng.
Speaking after the talks, which continued throughout the day at JPMorgan Chase’s headquarters in Manhattan, Bessent said they had held a successful meeting with China on trade and artificial intelligence. Bessent said the sides had agreed to meet again and stated that the United States had proposed establishing a notification mechanism between the two countries.
Mike Waltz, the U.S. permanent representative to the U.N., also said that the door remained open for Iran to return to the negotiating table.
U.S. Treasury yields and the dollar in focus
The yield on the U.S. 10-year Treasury note began the week flat at around 5%. The dollar index, which rose to 100 last week on expectations that the Fed could raise interest rates at successive meetings, also started the new week near those levels.
Gold fell 0.5% to $4,355 an ounce as high Treasury yields and a strong dollar increased its opportunity cost. The price of November-dated Brent crude fell 2.1% on diplomacy hopes to $101.70 a barrel.
On the New York Stock Exchange, the S&P 500 rose 0.17% and the Nasdaq gained 0.3% on Friday, while the Dow Jones fell 0.18%. U.S. stock-index futures started the week higher.
Europe watches energy pressure and the war in Ukraine
European stocks ended Friday lower. In addition to developments at the U.N. General Assembly, markets will be watching energy prices and purchasing managers’ index data from countries across the region.
Tensions in the Middle East and concerns over oil and gas supplies are prompting European investors to act cautiously. The renewed escalation of the conflict between Russia and Ukraine is also keeping geopolitical risks elevated.
Russia’s Defense Ministry said it had struck a logistics center, a warehouse and vessels used for military purposes in Ukraine. Ukrainian President Volodymyr Zelenskyy said he had discussed efforts to end the war with U.S. President Donald Trump and that they had also addressed a meeting planned to take place in New York in the coming days.
Zelenskyy said they had agreed to meet Trump in New York and that a diplomatic process was underway. As energy costs continued to pressure European economies, 10-year government bond yields rose in Germany, the United Kingdom and France.
On Friday, the FTSE 100 in the United Kingdom fell 1.45%, Italy’s FTSE MIB 30 declined 1.60%, France’s CAC 40 dropped 1.49% and Germany’s DAX 40 lost 1.60%. European stock-index futures, however, started the week higher.
U.S.-China optimism in Asian markets
Positive signals from talks between the United States and China increased risk appetite in Asian stock markets. Expectations that a meeting expected this week between U.S. President Donald Trump and Chinese President Xi Jinping could produce a positive outcome came to the fore.
Xi Jinping is expected to visit the United States on September 23. During Trump’s second term, U.S. tariff increases and technology restrictions, along with China’s control over rare-earth elements, have been among the main issues in disputes between the two countries.
After Trump and Xi Jinping met in Busan, South Korea, on October 30, 2025, the sides issued positive messages about a temporary understanding on disputed issues. The decline in oil prices also supported risk appetite in Asian markets.
Near the close, South Korea’s Kospi index was up 1.3%, China’s Shanghai Composite rose 0.5% and Hong Kong’s Hang Seng gained 0.5%. Markets in Japan remained closed for a holiday.
Erdoğan arrives in New York
The BIST 100 index on Borsa Istanbul ended Friday down 1.67% at 13,284.42 points. The October contract based on the BIST 30 index on Borsa Istanbul’s Futures and Options Market also fell 0.14% in the evening session from the regular-session close.
President Recep Tayyip Erdoğan arrived in New York, United States, to attend the 81st U.N. General Assembly and hold various meetings.
The Capital Markets Board extended the liquidation period for funds whose liquidation had been announced from three months to six months, taking into account their portfolio structures and market developments. On September 17, the board authorized Türkiye İş Bankası and Ziraat Bank to manage the processes concerning 131 investment funds being liquidated by seven portfolio management companies.
The dollar/Turkish lira exchange rate closed Friday at 48.7650. At the opening of the interbank market, the rate reached 48.8010, up 0.1% from the previous close.
In Türkiye, the capacity utilization rate, the real-sector confidence index and the August Producer Price Index for the Domestic Market will be monitored. In the BIST 100 index, 13,100 and 13,000 points are being watched as support levels, while 13,400 and 13,500 points are seen as resistance levels.
