Mixed trend in global markets focused on inflation and balance sheets

While global equity markets followed a mixed course this week under the influence of US inflation data, the Middle East agenda, and developments in the field of artificial intelligence, attention has turned to next week's heavy data agenda and earnings reports of major companies.

Markets, which started the week with cautious optimism driven by developments regarding energy supply, continued to search for direction toward the middle of the week following the release of US inflation data and developments that could impact artificial intelligence investments. Driven by the upward pressure of geopolitical risks originating from the Middle East and Russia-Ukraine on energy costs, annual inflation in the US reached its highest level in the last 4 months. Following the US inflation data that exceeded estimates, expectations strengthened that the US Federal Reserve (Fed) might resort to interest rate hikes in the future. In money markets, despite pricing that the Fed could implement a total of 3 rate hikes by the end of next year, bond yields and the dollar index finished the week on a downward trend.

Selling pressure in the technology and semiconductor sector directed investors toward government bonds. Concerns that high interest rates could negatively impact artificial intelligence investments and reports that Chinese chipmaker CXMT has made progress in chip development increased the selling pressure on global tech stocks. On a weekly basis in the New York stock exchange, the S&P 500 fell by 1.95% and the Nasdaq index dropped by 4.48%, while the Dow Jones index rose by 0.67%.

On the macroeconomic data front, the US Producer Price Index (PPI) increased above expectations in September, up 1.3% monthly and 6.3% annually. Earnings reports released by major banks in the country were also monitored. While Morgan Stanley's profit and revenue exceeded expectations in the third quarter, Bank of America's net profit decreased by 17% to $6.9 billion due to the recording of a $1.2 billion administrative fine. JPMorgan Chase, Goldman Sachs, Citigroup, and Wells Fargo also announced their third-quarter financial results.