Three major central banks left policy settings unchanged over the week ending 31 July 2026. The Federal Reserve held its federal funds target range at 3.50%–3.75% in a 9–3 vote, with three policymakers dissenting in favour of an increase — a signal of concern within the committee about inflation remaining above target. The Bank of England held its base rate at 3.75%, and the Bank of Japan maintained its policy rate at 1%.
U.S. equity indices closed higher after a week marked by sharp intraweek swings tied to the Fed decision, the ongoing U.S.–Iran conflict and volatility in artificial intelligence-related shares. U.S. data was softer than expected across the board: core PCE inflation rose 0.1% in June against a 0.2% consensus, second-quarter GDP grew at a 1.5% annual rate against expectations of 2.1%, and the Conference Board’s Consumer Confidence Index fell to 90.8.
European equities advanced, with the STOXX Europe 600 reaching a new intraday high on Friday morning. Eurozone second-quarter GDP grew 0.4% sequentially, above the 0.2% consensus, while annual inflation ticked up to 2.9% in July.
Asian markets diverged. Japanese equities eased amid uncertainty over the impact of an earthquake in Kumamoto Prefecture and a sudden appreciation in the yen that prompted speculation of official intervention. In China, mainland technology and growth stocks fell alongside a global AI-related sell-off, while Hong Kong advanced on strength in large internet platforms.
Market Snapshot
Weekly performance across major global indices (week ending (date) (month) 2026)
| Index | Friday’sClosingPrice | WeeklyChange(%) | Direction | |
| DJIA | 52485.03 | 1.04 | ▲ | |
| S&P500 | 7,489.72 | 1.05 | ▲ | |
| NASDAQComposite | 25,373.85 | 1.59 | ▲ | |
| FTSE100(UK) | 10,868.05 | 1.23 | ▲ | |
| CAC40(France) | 8,509.64 | 1.64 | ▲ | |
| STOXXEurope600 | 649.19 | 0.73 | ▲ | |
| Nikkei225(Japan) | 64,362.02 | -0.39 | ▼ | |
| CSI300(China) | 4,588.20 | -1.31 | ▼ | |
| HangSeng(HongKong) | 25,884.43 | 3.69 | ▲ | |
| BrentCrude | 90.12 | -6.88 | ▼ | |
| Gold | 4,094.10 | 0.65 | ▲ |
ForeignExchange
(For the week ending (date) (month) 2026)
| Pair | Friday’sClose | Weekly Change |
| EUR/USD | 1.1524 | 1.29 % |
| USD/JPY | 160.183 | -2.23 % |
| GBP/USD | 1.3461 | 1.11 % |
| USD/CHF | 0.8058 | -1.36 % |
| AUD/USD | 0.7025 | 0.83 % |
U.S. Markets Overview:
Major U.S. stock indexes finished the week mixed. The Nasdaq Composite rose 1.60%, the S&P 500 1.05% and the Dow Jones Industrial Average 1.04%, while the S&P MidCap 400 declined and the Russell 2000 finished near where it started. Trading was volatile, shaped by the Federal Reserve’s policy meeting, the continuing U.S.–Iran conflict and sharp swings in artificial intelligence shares. The Federal Reserve held the federal funds target range at 3.50%–3.75% on a 9–3 vote, with three members seeking an increase on concern that inflation sits above target; Chair Kevin Warsh gave little detail on what might prompt the next move, and equities fell sharply on Wednesday before recovering. Long-dated Treasury yields rose, the 30-year passing 5.2% for the first time since 2007. Economic data came in soft: core PCE registered 0.1% for June against a 0.2% projection, second-quarter GDP grew at an annualised 1.5% where 2.1% was expected, and the Conference Board’s confidence index fell to 90.8. Consumer discretionary led sectors after Amazon’s earnings; utilities and real estate lagged.
European Markets:
The pan-European STOXX Europe 600 Index ended the week 0.73% higher in local-currency terms and reached an intraday record on Friday morning. Corporate earnings ahead of projections supported the move, alongside a partial recovery in appetite for AI-linked shares later in the week and Brent crude holding under USD 100 per barrel. Germany’s DAX gained 2.11%, France’s CAC 40 rose 1.64%, the UK’s FTSE 100 climbed 1.23% and Italy’s FTSE MIB added 0.71%. Eurozone second-quarter GDP grew 0.4% on the quarter, twice the projected rate, with AI-related investment and government spending absorbing pressure from the U.S.–Iran conflict and energy costs; Spain led the larger economies at 0.7%. Annual inflation reached 2.9% in July from 2.8%. German unemployment rose to 6.4%, a tenth above projections, though second-quarter output grew 0.2% against a 0.1% projection. The Bank of England held its base rate at 3.75%, noting that renewed Middle East escalation could sustain energy price volatility.
Asian Markets
Japan
Japanese equities declined, with the Nikkei 225 falling 0.39% and the broader TOPIX down 0.20%. Uncertainty over the impact of a substantial earthquake in Kumamoto Prefecture on Tuesday, the strongest since Noto in January 2024, Uncertainty persisted over the impact of a substantial earthquake in Kumamoto Prefecture on Tuesday, the strongest since Noto in January 2024. The Bank of Japan held its policy rate at 1%, with one of nine board members seeking 1.25%, and described underlying consumer inflation as nearing the 2% objective; it cut its FY2026 inflation projection to 2.5% from 2.8% and nudged growth to 0.6% from 0.5%. Governor Kazuo Ueda said upside price risks warrant closer attention and flagged detailed discussion from the next meeting, which markets read as preserving a September option. The 10-year JGB yield settled below 2.8%, and the yen moved through 160 to the U.S. dollar on Thursday, its strongest intraday session since December 2023, prompting speculation of official intervention. Tokyo core CPI rose 1.9% annually, while June retail sales grew 0.5% against a 3.1% projection.
China
Hong Kong and the mainland moved apart. The Hang Seng added 3.69% in local-currency terms, helped by buying in the largest internet names, while the CSI 300 lost 1.31% as mainland technology and growth stocks tracked the worldwide pullback in AI-linked shares. The Shanghai Composite finished 0.47% ahead. ChangXin Memory Technologies, a memory-chip producer, began trading on Monday in the region’s biggest float of 2026 to date and ended its opening session about 466% above the issue price; chip stocks nonetheless lost ground later in the week, with valuations and the returns available on AI spending both raised as concerns. On policy, the Politburo restated existing settings, describing fiscal support as more proactive and monetary conditions as moderately loose, and stopped short of any large-scale new package. July activity readings all sat under the expansion threshold: manufacturing at 49.2 against 50.3 in June, its first such reading since February, services and construction at 49.0, and the composite at 49.3.
Commodities
Oil
Brent crude closed the week at USD 90.12 a barrel, down 6.88% from USD 96.78 the previous Friday. T. Rowe Price noted that Brent remaining below USD 100 a barrel was among the factors supporting European equity sentiment over the week.
Gold
Gold closed at USD 4,094.10, up 0.65% from USD 4,067.60 the previous Friday.
WeekAhead
Points of focus flowing from the week’s developments:
- Federal Reserve communication. With three policymakers dissenting in favour of a rate increase and Chair Warsh offering limited guidance on the conditions for a future adjustment, subsequent Fed commentary may attract attention.
- U.S. labour market data. The July employment report is scheduled for release on Friday 7 August, following the third consecutive month of deteriorating consumer views of labour market conditions reported by the Conference Board.
- Bank of Japan. Governor Ueda indicated the board intends to have thorough discussions from its next policy meeting onward, which market participants viewed as keeping a September move open.
- Japanese yen. Following Thursday’s move past JPY 160, participants may watch for further signs of official activity in foreign exchange markets.
- AI-related earnings and capital expenditure. Questions about elevated capital spending, financing arrangements and competition remained a source of volatility across U.S., European and Chinese technology shares.
- Bank Indonesia leadership. President Prabowo Subianto is to nominate a permanent replacement for Governor Perry Warjiyo, subject to parliamentary review and approval.
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