Weekly Market Update

Global Market News

Global Equities Decline

Global equities ended the week modestly higher. For the week, the S&P 500 rose 1.2%, and the Dow Jones Industrial Average rose 0.9%, while the Nasdaq gained 0.6%. The US 10-year Treasury yield rose to 5.26% from 5.17% a week earlier, while West Texas Intermediate crude traded near $91.20 per barrel. Volatility, as measured by the Cboe Volatility Index (VIX), remained subdued at approximately 14.8.

India’s Central Bank Raises Rates and Signals More Hikes

The Reserve Bank of India raised its benchmark repo rate by 25 basis points to 5.5 percent on Wednesday, its first increase in nearly four years, and shifted its policy stance to “calibrated tightening” as price pressures broadened. Governor Sanjay Malhotra described the new stance as a “milder” form of tightening, saying the length and extent of the cycle would depend on inflation and growth. Economists at Goldman Sachs, Standard Chartered, Deutsche Bank and Morgan Stanley expect another 25-basis-point hike at the Dec. 4 meeting, and some see a further half point in the first half of 2027, which would take the rate to 6.25 percent. HSBC cautioned that the RBI has not committed to a specific number of hikes and expects a pause after December. Analysts cited higher energy costs tied to the Middle East conflict, weak monsoons that threaten food prices, and a rupee near a record low. India’s economy grew 7.8 percent in the April-June quarter.

International Developments

Yemen Fighting Escalates Near Bab el-Mandeb Strait

Yemeni government forces backed by a Saudi-led coalition air campaign said Monday they had recaptured several key areas around the Bab el-Mandeb Strait, including the town of Dhubab, from Iran-backed Houthi rebels. The Houthis seized the port city of Mocha and nearby territory in mid-September, gaining control of the Yemeni side of a strait through which 12 percent of global trade transits, according to AP. The Houthis denied that Mocha had fallen, and Al Jazeera said it could not independently verify the battlefield claims. The Houthis claimed missile and drone attacks on Riyadh’s King Khalid International Airport and an Aramco refinery in Rabigh, which Riyadh did not confirm. Saudi Arabia’s civil aviation authority said three people suffered minor injuries in attacks on the Jazan and Najran airports. Saudi Arabia, Turkey and Pakistan also agreed to deploy forces to the kingdom under a mutual defense pact.

Oil Exports Rebound, but Iran Retains Leverage

Crude oil exports from the Middle East rose above pre-war levels on four of the seven days in the last week of September, according to provisional Kpler data, compared with a pre-war average of 18 million barrels per day. Attacks on shipping continue, however, with the U.K. Maritime Trade Operations agency reporting at least one a day in the Strait of Hormuz or Gulf of Aden since Oct. 2. Brent crude remained above $100 a barrel, about 40 percent higher than before the war, and much of the increase in exports is moving through longer, costlier bypass routes. The Group of Seven announced Friday that it would release 100 million barrels of oil and diesel from strategic stockpiles over the next four months. A U.S. naval blockade imposed in July has largely kept Iran from moving its own oil through Hormuz. Council on Foreign Relations senior fellow Max Boot argued that the rebound does not signal that Tehran is close to defeat or to accepting Washington’s terms.

Former BND Chief Accused of Espionage and Attempted Treason

German federal prosecutors said Tuesday they had arrested August Hanning, 80, who led the Federal Intelligence Service, or BND, from 1998 to 2005, on suspicion of treasonous espionage, obtaining state secrets and attempted treason. Prosecutors allege that in 2010 Hanning agreed to pay a former BND office manager, identified as Manfred D., for confidential intelligence, and that Manfred D., who held his post until March, supplied around 2,000 documents over the years. Prosecutors said Hanning used the material to prepare an analysis for a foreign intelligence officer and shared political information with another foreign service, but they did not name the countries or say whether the analysis was delivered. Der Spiegel reported that investigators were examining a possible link to Azerbaijan, which prosecutors declined to comment on. Manfred D. was also arrested. Hanning did not respond to a request for comment.

US Social & Political Developments

Both Chambers in Play as Midterms Near

With less than a month until Election Day, Democrats are favored to win the House, with the Cook Political Report forecasting a net gain of five to 15 seats that would give the party 220 to 230 seats, against 218 needed for a majority. Polling averages put President Trump’s approval rating at 37 percent, tied for the lowest ahead of a midterm in the past half century, and the president’s party has historically lost seats in midterm elections. Factors that could limit Democratic gains include mid-decade redistricting, fewer competitive districts and a Republican spending advantage. In the Senate, where Republicans hold 53 seats and Democrats 47, 10 races are considered key, including Maine, Michigan, North Carolina, Ohio, Texas, Iowa, Kansas and Georgia. Democrats need a net gain of four seats for control. The Iran war and cost-of-living pressures are weighing on Republicans, while 42 House races are expected to decide that chamber.

Cornell Fraternity Case Prompts Special Prosecutor and Scrutiny of University

A former Cornell student sued the university and seven former Chi Phi fraternity members last month, alleging she was given ketamine and incapacitated while members of the fraternity sexually assaulted her at their house in October 2024. Tompkins County District Attorney Matthew Van Houten initially declined to pursue charges, then said Cornell police had omitted key information from their summary, including a transcript in which she said she was confident she had been raped. He has said New York law did not allow him to prosecute based solely on claims of incapacitation, and some accused men told university investigators the activity was consensual. Gov. Kathy Hochul appointed Attorney General Letitia James as special prosecutor on Oct. 1, saying the woman was “failed” by people and institutions obligated to protect her. One defendant has since petitioned a court to remove James, arguing her public comments showed bias. A judge has not ruled.

Corporate/Sector News

Trump Administration Opens Race-Based Lending Probe into Wells Fargo

The Department of Housing and Urban Development sent a letter Wednesday to Wells Fargo Chief Executive Charles Scharf saying it is investigating whether the bank violated the Fair Housing Act through programs favoring minority borrowers. The letter, signed by Assistant Secretary Craig Trainor, cited the bank’s “repeated public promotion of explicit race-based policies,” including lower-cost refinancing for Black homeowners and a $150 million program to advance racial equity in homeownership, and raised the possibility of involving the Justice Department. HUD also said the bank had adopted a strategy of “sorting” homeowners and offering different terms based on race. The bank committed $60 billion in loans in 2017 to help add at least 250,000 Black homeowners by 2027 and had met about 40 percent of that pledge when it commissioned a racial-equity assessment in late 2023. Wells Fargo declined to comment. A senior HUD official said the agency is reviewing similar initiatives at other banks.

Microsoft Suspended from Green Card Program

Vice President JD Vance announced Thursday that the Trump administration was suspending Microsoft from the Labor Department’s permanent labor certification program, the process required for most employment-based green cards. Vance said Microsoft had laid off 6,000 American workers in the past year while benefiting from 6,300 H-1B visas and nearly 3,000 green cards, adding, “You’ve got to hire great American workers.” Microsoft did not immediately respond to requests for comment. Labor Secretary Keith Sonderling said the suspension would also cover Adobe, Cognizant, Infosys, Tata Consultancy Services, Wipro, HCL Technologies and Capgemini. According to Reuters, the freeze does not appear to directly affect current H-1B holders but could block a common route to permanent residency. Labor Department Inspector General Anthony D’Esposito also announced investigations into nine universities, including Harvard, Stanford and MIT, over alleged misuse of J-1 exchange-visitor visas.

Porsche’s Restructuring Seeks to Offset the Effect of Falling Revenues

Porsche unveiled a turnaround plan at a capital markets day in Weissach on Wednesday, aiming to rebuild profitability around higher-priced sports cars after its operating margin fell to 1.1 percent last year from 18 percent two years earlier. CEO Michael Leiters described the approach as “value over volume,” and the company said it would lower its break-even point to fewer than 200,000 units, compared with 279,449 deliveries last year. Porsche plans to cut 9,000 positions, about a fifth of its workforce, and reduce development costs by as much as a fifth while raising the average price of its top-end models by about 20 percent. The plan follows a steep drop in China, where deliveries fell by almost a third in the first half of the year, and about 700 million euros in U.S. tariff costs last year. Leiters targets an operating margin of 10 to 15 percent by about 2030 and cautioned that “none of this will happen overnight.” Volkswagen, which owns 75 percent of Porsche, recently announced a 6 billion euro write-down tied partly to the unit.