USA

US equities snapped a three-week winning streak, with all three major benchmarks posting their first weekly declines since late July as a sell-off in long-dated Treasuries and renewed US–Iran tensions drove a risk-off tone. Through Thursday's close the S&P 500 had lost 1.9% on the week and the Nasdaq 2.5%, while the Dow had declined 1.8%, before a Friday rebound trimmed the damage. On Friday the S&P 500 climbed 0.43% to 7,674.37 and the Nasdaq rose 0.43% to 26,180.45, while the Dow gained 517.80 points, or 0.98%, to 53,277.01, supported by healthcare names such as Merck and Johnson & Johnson. The dominant macro story was fiscal and geopolitical: the 30-year Treasury yield pushed to its highest in decades, and Treasury Secretary Scott Bessent announced plans to expand the bond buyback program beyond $4 billion per issue in an attempt to steady the market, even as President Trump escalated an "economic warfare" campaign against Iran that kept oil elevated (Brent near $93). Data was firmer than the price action implied. The August flash composite PMI was the week's standout: the S&P Global US Composite PMI surged to 56.0 — a 52-month high and the fastest expansion since April 2022 — with services jumping to 56.8 (a 20-month high) while manufacturing eased to 53.2. Labor data stayed resilient, as initial jobless claims fell by 6,000 to 206,000, below expectations, while continuing claims rose by 18,000 to 1,799,000. On the earnings front, Walmart fell over 10% on the week after a rare earnings miss weighed on its outlook, dragging on the retail complex, though BJ's Wholesale beat. Outside equities, bitcoin posted a weekly advance of 22% — its best week in two years — and gold rose roughly 5% for a fifth straight weekly gain, reflecting rotation into hard assets. Investors also positioned ahead of the following week's Jackson Hole symposium and Nvidia earnings.

Europe

European markets had a turbulent, mostly negative week dominated by the global bond sell-off, sticky inflation, and Middle East risk, before a Friday recovery pared losses. The pan-European STOXX Europe 600 ended down about 0.56% in local-currency terms, with Germany's DAX closing 1.15% lower, France's CAC 40 down 1.76%, and Italy's FTSE MIB off 1.71%, while the UK's FTSE 100 bucked the trend, climbing 0.62%. On Friday the tone steadied: the CAC 40 gained 0.37% to 8,484.43, Germany's DAX rose 0.56%, London's FTSE 100 advanced 0.64%, and the broader STOXX 600 added 0.51%, aided by a rebound in luxury (LVMH, Hermès, Kering) and banks. Spain's IBEX 35 remained one of the region's more resilient benchmarks, trading around 19,997 and up roughly 0.9% on Friday. The data flow reinforced a two-speed picture. The eurozone flash composite PMI came in at 52.1, above expectations and July's 52, and notably new export orders grew for the first time in four-and-a-half years, with total new orders rising at a 40-month high — though the strength was uneven, as German services stayed in contraction near 48.5 and France's composite slipped to 48.8. Inflation stayed a concern: final eurozone HICP accelerated to 2.9% in July from 2.8%, driven by energy inflation jumping to 10.3% as US–Iran hostilities resumed. In the UK, CPI rose to 2.9% in July from 2.6%, the highest in four months, largely on a 13% hike in Ofgem's energy price cap that pushed gas prices up 14.7%. Corporate news featured Banca Monte dei Paschi launching combined €34 billion bids for Banco BPM and Banca Generali.

Japan

Japanese equities materially underperformed, with the Nikkei 225 among the weakest global benchmarks as rising domestic and US yields, softer Wall Street, and higher oil overwhelmed otherwise encouraging domestic fundamentals. The Nikkei fell roughly 4% over the week, closing Friday at 66,016.36, down 0.30% on the day, while the broader TOPIX proved more resilient — turning positive on Friday as dip-buying driven by strong domestic PMI and corporate earnings helped offset the sell-off. The macro backdrop was a study in "good news is complicated." Q2 real GDP grew just 0.3% quarter-on-quarter (down from 0.5%) and 0.7% year-on-year, as softer domestic demand offset export growth, a miss versus expectations. Inflation, however, firmed: July headline CPI rose to 1.9% year-on-year from 1.6%, with core CPI at 1.8%, alongside wage growth of 3.4% — figures widely read as confirmation that Japan is emerging from decades of deflation, though a five-yearly base-year rebasing complicated the read. The flash PMIs signaled a continued growth spurt with near-record price pressures. The combination pushed Bank of Japan September rate-hike odds to near 80% and lifted JGB yields (10-year around 2.875%, 30-year near 4.06%). Crucially, higher yields in Japan are being interpreted as a reflationary escape from deflation rather than a pure headwind, which supported rotation toward banks and value/domestic names within TOPIX even as rate-sensitive and richly-valued Nikkei heavyweights lagged.

China

Chinese markets were volatile but ended broadly stabilized, diverging from the developed-market weakness. The Shanghai Composite endured a sharp roughly 2.5% Wednesday drop before recovering, rising 0.24% on Thursday to close near 3,903.7, within striking distance of the psychologically important 4,000 level, and finishing the week around 3,905. Hong Kong's Hang Seng closed Thursday up 0.8% at 25,698.49 and rallied further Friday to about 26,009 (+1.21%), aided by a broad regional bounce as semiconductor names recovered. Monetary policy was the marquee event: the PBOC held the Loan Prime Rate steady for a 15th consecutive month, keeping the one-year rate at 3.00% and the five-year rate at 3.50%, reflecting a cautious, "prioritize stability" stance despite soft data. The economic backdrop remained fragile — Q2 GDP growth eased to its lowest since Q4 2022, and July industrial production and retail sales both slowed while new yuan loans posted their sharpest contraction on record and housing prices kept falling, even as exports stayed supported by AI-related demand. Policymakers leaned on targeted measures rather than broad rate cuts, with Shanghai cutting the down-payment ratio on some second homes to 15%, and markets awaited the NPC Standing Committee meeting (Aug 25–28) for further signals. Sentiment was helped Thursday by a wave of gains in pharmaceutical and biotech stocks, though southbound flows turned to net selling. In notable corporate news, Evergrande founder Xu Jiayin was sentenced to life imprisonment.