Expectations that negotiations could resume in the Middle East, combined with easing concerns over energy supplies, supported a recovery in global markets. The decline in oil prices also limited pressure on bond yields.
The price of October-delivery Brent crude fell 2.6% to $86.3 a barrel. The yield on the U.S. 10-year Treasury note remained flat at around 4.65%, while the dollar index rose 0.1% to 98.9. The price of gold fell 0.4% to $4,641 an ounce.
U.S. data calendar and Nvidia earnings in focus
While concerns over inflation continued in the United States, expectations that the Federal Reserve could raise interest rates once more by the end of the year remained in place. Market participants focused on growth and personal consumption expenditure data, as well as the core personal consumption expenditures price index, which is closely monitored for signs of price pressures.
A slowdown in the core personal consumption expenditures price index could alter expectations for the Fed’s monetary policy. Such a development could increase volatility in the markets.
Chipmaker Nvidia’s earnings report, which was expected to be released, was also among the issues monitored by investors. The company’s results are important for whether the rally centered on artificial intelligence will continue, while Nvidia shares rose 2.2% after seven consecutive trading days of losses.
The S&P 500 gained 0.32%, the Nasdaq rose 0.66% and the Dow Jones added 0.30%. U.S. stock index futures, however, started the day mixed.
Canada announces retaliatory tariffs on U.S. products
The Canadian government announced that, in response to the 50% tariffs imposed by the United States on numerous Canadian products, it would apply retaliatory tariffs of 15%, 25% or 50% on approximately $20 billion worth of U.S. products starting September 8.
Canada’s Finance Ministry said the retaliatory tariffs would focus on the steel, dairy, household appliance, agricultural equipment, paper and electronics sectors. The rate will be 50% for steel and aluminum products, furniture and clothing items that were previously subject to a 25% retaliatory tariff.
Household appliances, dairy products such as cheese, fish and seafood, as well as certain steel- and aluminum-derived products, are among the items that will face a 25% tariff.
German data influence European stock markets
European stock markets moved higher, except in France. Expectations of lower energy costs and macroeconomic data released from Germany were decisive in pricing across the region.
Germany’s economy grew 0.3% in the second quarter from the previous quarter and 1% year on year. The Business Climate Index released by the Munich-based ifo Institute for Economic Research also rose to 88.8 points in August, extending its increase to a fourth consecutive month.
The FTSE 100 in the United Kingdom rose 0.29%, Italy’s FTSE MIB 30 gained 0.34% and Germany’s DAX 40 advanced 0.61%. France’s CAC 40 index fell 0.16%.
Shares of luxury fashion and accessories companies posted notable losses in France. Rising living costs in Europe, the impact of U.S.-Iran tensions on tourism in the region and slowing demand put pressure on luxury-goods shares.
Technology and semiconductor shares gain in Asia
The rise in risk appetite in U.S. and European markets spread to Asian stock exchanges. Technology and semiconductor shares recovered ahead of Nvidia’s earnings report.
In South Korea, SK Hynix shares rose 2.5%, Samsung Electronics gained 2.9% and Hanmi Semicon advanced 1.2%. Shares of SMIC, China’s largest semiconductor manufacturer, also gained 4.8%.
Near closing, Japan’s Nikkei 225 was up 0.8%, China’s Shanghai Composite rose 0.6%, South Korea’s Kospi gained 1.8% and Hong Kong’s Hang Seng advanced 0.6%.
Türkiye’s five-year CDS spread falls to 217 basis points
The BIST 100 index on Borsa Istanbul ended the day down 0.19% at 14,473.42 points. The August-dated BIST 30 futures contract on VIOP rose 0.24% in the evening session compared with the regular-session close.
Türkiye’s five-year credit default swap spread fell to 217 basis points amid expectations that geopolitical risks in the Middle East could ease and the impact of domestic liquidity-management measures. This was the lowest level recorded since February 18.
Dollar/Turkish lira closed the previous day at 48.0920. The exchange rate traded at 48.1170 at the opening of the interbank market, up 0.1%.
A quiet domestic data calendar is expected, while U.S. personal consumption expenditure and growth data will be monitored abroad. For the BIST 100, 14,400 and 14,300 points are being followed as support levels, and 14,600 and 14,700 points as resistance levels.
Data to watch
- Weekly mortgage applications in the United States
- U.S. personal income for July
- U.S. personal spending for July
- U.S. personal consumption expenditures price index for July
- U.S. durable goods orders for July
- Annualized U.S. second-quarter GDP data
