It was a relatively quiet week for global financial markets, with limited economic data and few market-moving corporate results to digest. Technology stocks performed strongly, while Asian equities also advanced, with South Korea’s KOSPI among the notable performers.
US stocks closed the week mixed, the main focus was on US inflation, with July’s data providing some reassurance that price pressures continue to moderate. Headline inflation eased marginally to 3.4% year-on-year, from 3.5% in June, while core inflation, which excludes more volatile food and energy prices, fell to 2.5%, its lowest level in five months and in line with expectations. While inflation remains above the Federal Reserve’s 2% target, the modest deceleration was well received by investors, with US equities reaching fresh record highs on Thursday.
Producer price inflation also came in below expectations, at 4.7% year-on-year in July versus forecasts of 4.9%. The data provided further evidence that inflationary pressures, including those associated with tariffs and the Middle East conflict, may be easing. The latest data reinforces expectations that policymakers are under little pressure to raise interest rates, making a further pause at upcoming meetings increasingly likely.
In the corporate space, attention turned to Anthropic, with reports suggesting the AI company could seek a valuation of more than $2 trillion when it eventually lists in the US. An initial public offering could take place as early as October, although no formal date has yet been announced. The scale of the reported valuation highlights the continued investor enthusiasm surrounding artificial intelligence, despite ongoing debate over valuations across the technology sector.
European markets ended the week on a weaker footing, with major indices breaking a four-week winning streak. Investor sentiment was pressured by ongoing uncertainty surrounding the Middle East, which offset the positive backdrop of a robust earnings season.