Weekly Global Markets Wrap: Week Ending 18 September 2026
Summary
Global markets were mixed over the week ending 18 September, as the Federal Reserve delivered its first interest rate increase since July 2023 and signalled the possibility of another before year end. The Federal Open Market Committee voted 12–0 to raise the federal funds target range by 25 basis points to 3.75%–4.00%, while the Summary of Economic Projections lifted the median federal funds rate projection to 4.10% for year-end 2026, up from 3.80% in June (Board of Governors of the Federal Reserve System, September 2026). Growth projections were revised up to 2.30% for 2026 and the year-end unemployment projection was lowered to 4.10% (Board of Governors of the Federal Reserve System, September 2026). U.S. equities diverged, with the Dow Jones Industrial Average down 1.69% in a third consecutive weekly decline, the S&P 500 down 0.08% and the NASDAQ Composite up 0.72% (Reuters; MarketWatch, September 2026).
European equities were mixed, with the FTSE 100 up 0.08%, the STOXX Europe 600 down 0.57% and the CAC 40 down 1.40% (Reuters; MarketWatch, September 2026). The Bank of England held its benchmark rate at 3.75% in a 6–3 vote (Bank of England, September 2026). Asian markets were also mixed, with the Nikkei 225 up 1.57%, the CSI 300 down 0.06% and the Hang Seng down 0.22% (Reuters; MarketWatch, September 2026). The Bank of Japan raised its policy rate by 25 basis points to 1.25%, the highest level since 1995, but the yen weakened, with USD/JPY rising 2.15% to close at 156.88 (Bank of Japan; Reuters, September 2026).
Commodity markets stabilised. Brent crude declined 0.71% to USD 103.87 a barrel as markets judged the closure of a key Saudi pipeline to have a softer impact on supply than initially feared, while gold rose 0.36% to USD 4,424.90 per ounce as easing energy prices reduced inflation concerns (Reuters; MarketWatch, September 2026).
Market Snapshot
Weekly performance across major global indices (week ending 18 Sep 2026):
| Index | Friday’s Closing Price | Weekly Change (%) | Direction |
|---|---|---|---|
| DJIA | 51,682.64 | -1.69 | ▼ |
| S&P 500 | 7,650.50 | -0.08 | ▼ |
| NASDAQ Composite | 26,522.55 | 0.72 | ▲ |
| FTSE 100 (UK) | 10,659.13 | 0.08 | ▲ |
| CAC 40 (France) | 8,065.02 | -1.4 | ▼ |
| STOXX Europe 600 | 635.45 | -0.57 | ▼ |
| Nikkei 225 (Japan) | 65,018.95 | 1.57 | ▲ |
| CSI 300 (China) | 4,507.39 | -0.06 | ▼ |
| Hang Seng (Hong Kong) | 24,750.78 | -0.22 | ▼ |
| Brent Crude | 103.87 | -0.71 | ▼ |
| Gold | 4,424.90 | 0.36 | ▲ |
Foreign Exchange
(For the week ending 18 Sep 2026)
| Pair | Friday’s Close | Week’s Change (%) |
|---|---|---|
| EUR/USD | 1.1486 | -0.99 |
| USD/JPY | 156.88 | 2.15 |
| GBP/USD | 1.3395 | -0.97 |
| USD/CHF | 0.8220 | 0.69 |
| AUD/USD | 0.7124 | -0.45 |
U.S. Markets Overview
Major U.S. equity indices finished the week mixed, with the Dow Jones Industrial Average declining 1.69% in a third consecutive weekly loss, the S&P 500 easing 0.08% and the NASDAQ Composite rising 0.72% (Reuters; MarketWatch, September 2026). Market attention centred on the Federal Open Market Committee meeting. The Committee voted unanimously, 12–0, to raise the federal funds target range by 25 basis points to 3.75%–4.00%, its first increase since July 2023. The Summary of Economic Projections lifted the median federal funds rate projection to 4.10% for year-end 2026, up from 3.80% in June, with 16 of the 18 participants submitting projections expecting a further increase this year. Growth projections were revised up to 2.30% and the year-end unemployment projection was lowered to 4.10% (Board of Governors of the Federal Reserve System, September 2026).
Economic data released during the week broadly supported the decision. Advance estimates of retail and food services sales for August were USD 773.9 billion, up 1.2% from the previous month and 6.0% from August 2025, ahead of the 0.8% consensus forecast, while the July figure was revised to a 0.5% decline. Control group sales rose 1.4% month on month (U.S. Census Bureau, September 2026). Initial unemployment claims fell by 10,000 to 196,000 in the week ending 12 September, below market expectations, while continuing claims declined to 1,730,000 (U.S. Department of Labor, September 2026). The Philadelphia Fed general business activity index eased to 37.8 in September from 47.4 in August, remaining in expansion territory, although the employee count index fell to 11.8 from 27.9 (Federal Reserve Bank of Philadelphia, September 2026). Housing was the weak spot, with August housing starts falling 2.6% month on month to a seasonally adjusted annualised rate of 1.275 million units, the lowest level since October 2025. Multi-family starts fell 22.5% to 344,000, while single-unit starts rose 7.6% to 918,000 (U.S. Census Bureau, September 2026).
Treasury supply remained a focus. The 20-year bond reopening on 15 September cleared at a high yield of 5.420%, with a bid-to-cover ratio of 2.57 and indirect bidders awarded 52.5% of the offering (U.S. Department of the Treasury, September 2026). The 10-year Treasury yield reached 5.00% during the week, while the 2-year yield rose 12 basis points to 4.75% and the 20-year yield eased 1 basis point to 5.38%, resulting in a flatter yield curve (U.S. Department of the Treasury; Reuters; MarketWatch, September 2026).
European Markets
European equities were mixed over the week, with the FTSE 100 rising 0.08%, the STOXX Europe 600 easing 0.57% and the CAC 40 falling 1.40% (MarketWatch, September 2026). The Bank of England kept its benchmark rate at 3.75% in a 6–3 vote, while cautioning that higher global energy input costs could warrant an increase later in the year (Bank of England, September 2026). The pan-European index fell 1.1% on Friday in broad-based losses led by automobile and telecom shares, with the automobile and parts sector down 3.4% after Volkswagen cut its outlook and flagged EUR 10 billion in one-off items (MarketWatch, September 2026). Retreating oil prices through the second half of the week provided some relief to the region’s industrial cost outlook after several weeks of energy-driven pressure (Reuters, September 2026).
Asian Markets
Japan
Japanese equities advanced, with the Nikkei 225 rising 1.57% over the week to close at 65,018.95, supported by technology and AI-related shares (MarketWatch, September 2026). The Bank of Japan raised the uncollateralised overnight call rate to 1.25% from 1.00%, its highest level since 1995. The decision was not unanimous, with two board members voting to hold (Bank of Japan, September 2026). The yen weakened as the dissenting votes raised doubts over the pace of further tightening, with USD/JPY rising 2.15% to close at 156.88 (Bank of Japan; Reuters, September 2026). Japan’s annual inflation held steady at 1.9% in August, while core inflation eased to 1.7%, remaining below the Bank’s 2% target for a seventh consecutive month (Statistics Bureau of Japan, September 2026).
China and Hong Kong
Chinese markets were little changed, with the CSI 300 easing 0.06% and the Hang Seng Index declining 0.22% over the week to close at 24,750.78 (MarketWatch, September 2026). The Hong Kong Monetary Authority raised its base rate by 25 basis points to 4.25% following the Federal Reserve’s move, weighing on rate-sensitive property shares, though technology names recovered later in the week (Hong Kong Monetary Authority; MarketWatch, September 2026).
Commodities
Oil
Oil (Brent Crude Futures): Brent crude futures (BZ=F) settled at USD 103.87 a barrel, down 0.71% from the previous Friday (Reuters; MarketWatch, September 2026). The move reflected markets judging the closure of a key Saudi pipeline to have a softer impact on supply than initially feared, with Saudi Arabia rerouting exports through the Strait of Hormuz (Reuters, September 2026).
Gold
Gold (U.S. Gold Futures): U.S. gold futures (GC=F) settled at USD 4,424.90 per ounce, up 0.36% from the previous Friday (Reuters; MarketWatch, September 2026), as falling oil prices eased concerns over prolonged inflationary pressure, with gains capped by a stronger U.S. dollar (Reuters, September 2026).
Week Ahead
Points of focus flowing from the week’s developments:
Federal Reserve policy: With the target range now at 3.75% to 4.00% and the dot plot pointing to a possible further increase, market attention shifts to whether incoming data supports a move at the October meeting.
U.S. Treasury yields: The 10-year reached 5% during the week and long-dated supply continued to clear at elevated yields. Yield direction remains the dominant influence on equity valuations, particularly for rate-sensitive sectors.
U.S. consumer and housing: August retail sales were strong in nominal terms while housing starts fell to an eleven-month low. The divergence between consumer spending and interest-rate-sensitive construction activity will be a point of focus.
Bank of Japan: Two dissenting votes leave the pace of further normalisation uncertain. The Summary of Opinions from the September meeting is scheduled for release on 1 October.
Energy supply: Brent retreated as Saudi pipeline repair progressed. Developments around Middle East transit routes remain the dominant driver of energy prices in the near term.
Currency markets: The U.S. dollar strengthened across the majors, with USD/JPY rising above 156 despite the Japanese rate increase. Policy divergence between the Federal Reserve, the Bank of England and the Bank of Japan remains the key variable.
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