Weekly Market Update

Global Market News

Global Equities Gain

Global equities were up on the week despite the backdrop of Trump’s China tariff threats, an uptick in credit concerns, and the continued U.S. government shutdown. The S&P 500 and Nasdaq rose 1.70% and 2.14%, respectively, and the Dow Jones increased 1.56% on the week. The U.S. 10-year Treasury note dropped a couple of basis points to 4.01%, while the price of West Texas Intermediate crude oil tumbled to $57.54 per barrel. Volatility, as measured by the CBOE Volatility Index, rose several points since last week, closing Friday at 20.78.

IMF Upgrades Global Growth Outlook

The International Monetary Fund (IMF) has raised its global GDP growth forecast for 2025 to 3.2%, up from its previous estimate of 3.0% in July, citing stronger-than-expected resilience in the face of trade tensions and economic volatility. The 2026 forecast remains unchanged at 3.1%. Global inflation is projected to decline from 4.2% in 2025 to 3.7% in 2026, although it remains above target in some countries, particularly the United States. The U.S. economy is now expected to grow 2.0% in 2025, a slight upgrade from the earlier 1.9% forecast, supported by robust investment in artificial intelligence and technology. However, the IMF cautioned that global growth remains subdued and risks remain, including potential escalations in trade tensions, financial market corrections, and inflationary pressures, especially in the U.S. where core inflation has ticked up.

International Developments

Potential for Trump-Putin Meeting Amidst Missile Escalation

Signs are mounting that President Donald Trump and Russian President Vladimir Putin are preparing for a second in-person meeting, potentially within the next two weeks. The Kremlin confirmed discussions are underway, with Budapest floated as a possible venue, a symbolic choice given Hungarian Prime Minister Viktor Orbán’s warm ties with both leaders. The proposed summit comes amid rising tensions over Ukraine, where the Trump administration is reportedly considering supplying Kyiv with long-range Tomahawk cruise missiles to pressure Moscow into serious negotiations. Senior U.S. officials have signaled that the move remains under review but reflects Washington’s growing frustration with Russia’s renewed offensives across eastern Ukraine. Trump has hinted that any final decision would come only after consultation with Putin, framing the debate as part of his broader effort to “end the war through strength.” Meanwhile, Putin has warned that providing Tomahawks would “destroy relations” between Washington and Moscow, suggesting that such a decision could erase the fragile diplomatic thaw seen since Trump’s return to office.

Ceasefire Remains Tense in Wake of Egypt Peace Summit

Following the recently brokered Gaza ceasefire, former President Donald Trump hosted a high-profile peace summit in Sharm el-Sheikh, Egypt, joined by over twenty world leaders in what he called the “Trump Declaration for Enduring Peace and Prosperity.” Egyptian President Abdel Fattah el-Sissi hailed the summit as the region’s “last chance” for lasting stability, while nations such as Turkey and Qatar framed it as a pivotal test for broader Arab-Israeli reconciliation. Yet early tensions have already focused: Trump’s declaration sidestepped a binding commitment to a two-state solution, drawing criticism from Arab and European diplomats who view the agreement as largely symbolic. A late-stage effort to invite Israeli Prime Minister Benjamin Netanyahu was canceled after Turkish President Erdoğan threatened to withdraw, underscoring the delicate balance of competing interests. Adding to the strain, a dispute has emerged between Israel and Hamas over the pace and terms of a large-scale prisoner exchange, with Israel delaying the release of Palestinian detainees until all living Israeli captives are confirmed to be safely returned, prompting accusations of bad faith from Hamas. Meanwhile, humanitarian conditions in Gaza remain dire — aid convoys face heavy restrictions, hospitals are struggling, and disease risks are rising — raising fears that the truce could unravel without rapid action.

African Union Suspends Madagascar’s Membership Following Coup

In a startling turn of events, Madagascar’s military seized power after weeks of protests, and Colonel Michael Randrianirina, commander of the elite CAPSAT unit, has been sworn in as interim president following the ouster and impeachment of Andry Rajoelina. In response, the African Union (AU) swiftly suspended Madagascar’s membership “with immediate effect” until constitutional order is restored, signaling regional alarm at yet another democratic reversal. Randrianirina has acknowledged the AU’s decision and indicated openness to behind-the-scenes dialogue, while pledging a two-year transition to civilian rule and promising elections thereafter. The coup stems from youth-led “Gen Z” protests triggered by chronic infrastructure failure – power, water, governance – and widespread frustration with Rajoelina’s tenure.

US Social & Political Developments

New China Tariffs Following Rare Earth Export Restrictions

President Trump has threatened to impose 100% tariffs on Chinese imports in response to Beijing’s newly tightened export controls on rare earth elements, moves the U.S. sees as strategic coercion. China’s controls, effective later this year, expand licensing requirements for even trace uses of rare earths in goods shipped abroad, heightening pressure on global supply chains. Despite his aggressive posture, Trump later admitted that 100% tariffs may be “not sustainable,” signaling potential recalibration. U.S. officials, including Treasury Secretary Scott Bessent, have warned that China’s actions risk forcing a “decoupling” from Chinese supply chains, a scenario Trump may use to justify tariff escalation. Meanwhile, Beijing has responded by demanding the U.S. withdraw its tariff threat, warning of retaliatory measures. Markets are now watching whether rhetoric turns into policy, particularly as a Xi-Trump meeting looms ahead.

U.S. SOUTHCOM Commander Steps Down as Trump Greenlights CIA Actions in Venezuela

President Trump has confirmed that he has authorized covert CIA operations inside Venezuela, escalating his administration’s confrontation with Nicolás Maduro’s regime and opening the door to deeper clandestine engagement. This revelation comes on the heels of multiple lethal U.S. strikes on suspected drug-trafficking vessels in the Caribbean (which the administration claims were tied to Venezuelan routes), actions that have reportedly killed 27 people to date. Compounding the tensions, Admiral Alvin Holsey – commander of U.S. Southern Command (SOUTHCOM) – announced he will retire by year’s end, stepping down earlier than expected amid speculation over his disagreements with Defense Secretary Pete Hegseth and the strategic direction in Latin America. Holsey’s exit marks another in a string of senior leadership changes under Trump, raising questions about internal friction as the U.S. intensifies its covert and overt pressure campaigns against the Venezuelan state.

Government Shutdown Drags on Adding More Layoffs

The U.S. government remains partially shut down as Congress fails to pass a funding bill, and the fallout is mounting: more than 4,100 federal workers have been targeted for layoffs across agencies including Treasury, Education, and HHS, with the White House projecting cuts could exceed 10,000 staffers. A federal court in San Francisco temporarily blocked many of these reduction-in-force actions, citing concerns that the dismissals may be politically motivated. Meanwhile, key entities like the National Nuclear Security Administration are planning to furlough up to 80% of civilian staff if funding isn’t restored, threatening critical nuclear maintenance and oversight.

Corporate/Sector News

Google to Build Largest AI Hub Outside of US in India

Google has unveiled plans for a $15 billion AI hub in Visakhapatnam (Vizag), Andhra Pradesh, India, which will become its largest investment outside the U.S. The facility will host gigawatt-scale compute infrastructure, a new international subsea cable gateway, and expanded fiber-optic networks, all built in partnership with AdaniConneX and Airtel. Google says the hub will be fully integrated with its global AI stack and is expected to drive both Indian economic growth and U.S. innovation through spillovers in AI development. The announcement comes amidst growing concerns over the energy and water demands of large-scale AI infrastructure, especially in regions with limited regulatory oversight—challenges that experts say India must address rapidly if it is to sustainably scale compute capacity.

Major U.S. Banks in Argentina Bailout Talks

Major U.S. banks – JPMorgan, Citigroup, Bank of America, and Goldman Sachs – are reportedly in talks with the U.S. Treasury to extend an emergency $20 billion loan package to Argentina, backed by Argentine assets. The proposal is part of a broader $40 billion support initiative, which also includes a U.S. dollar-peso swap line to shore up liquidity. While the banks and Treasury have declined to comment publicly, sources say the facility is being structured to help Argentina meet sovereign debt obligations ahead of looming repayments. This move reflects Washington’s strategic tilt toward Latin America, though critics warn that Argentina’s shaky fiscal fundamentals and political uncertainty make any commitment risky.

Private Credit Under Scrutiny After High-Profile Bankruptcies

During JPMorgan’s recent earnings call, CEO Jamie Dimon warned of potential trouble in the private credit market, referencing the adage “there’s never just one cockroach in the kitchen” after two private-credit-funded companies—Tricolor Holdings and First Brands Group—filed for bankruptcy, exposing major financial institutions to significant losses. Later in the week, two regional banks in the western U.S., Zions Bancorporation and Western Alliance, reported substantial write-downs tied to fraudulent loans, further shaking investor confidence. While these incidents appear isolated for now, they’ve heightened scrutiny of credit markets, especially the opaque and rapidly growing private credit sector, raising concerns about broader financial instability.