Global stock markets are kicking off the week with strong gains. Following lower-than-expected U.S. inflation in September, a solid preliminary PMI reading for October, and growing optimism surrounding a potential Trump–Xi meeting, U.S. indexes ended last week at record highs. Despite dovish expectations from the Federal Reserve, bond yields and the dollar index showed little movement.
Global Optimism Drives Market Momentum
September’s U.S. inflation data came in softer than forecasts, with headline inflation at 0.3% and core inflation at 0.2%, compared to expectations of 0.4% and 0.3%. The milder inflation figures reassured investors, who are now pricing in a total of 125 basis points in rate cuts—50 basis points this year and 75 in 2026.
Semiconductor stocks such as AMD, Broadcom, and Nvidia are leading the rally, supported by easing U.S.-China tensions. Banks, airlines, communications, and automotive companies are also climbing on the back of strong third-quarter earnings. In contrast, gold mining and energy shares are lagging due to the decline in geopolitical risk premiums.
Political Stability Boosts Borsa Istanbul
A recent court ruling that reduced political uncertainty gave Borsa Istanbul a significant lift. The benchmark index jumped 7% last week, closing just below the psychological 11,000 level. Turkey’s risk premium fell back to 252, the same level seen before the political shock. The strongest gains came from insurance (up 15%), banking (13%), refining (10%), and holding companies (9%), while white goods, aviation, and petrochemical stocks underperformed.
Europe’s Gains Expected to Be Limited
Our market outlook remains unchanged. Improving U.S.-China relations, easing inflation concerns, and expected Fed rate cuts should continue to support global equities in the short term. American and Chinese tech stocks will likely remain the key drivers of growth. European stocks, however, are expected to rise more modestly due to the ongoing Russia-Ukraine conflict preventing a full recovery.
Turkish Markets to See Volatile Uptrend
We expect Turkish markets to maintain a volatile upward trend. Effective economic management could continue to reduce the country’s risk premium, supporting market performance. However, political shocks will likely persist in a two-steps-forward, one-step-back pattern until the elections, creating periods of high volatility in both directions. We still view such correction phases as buying opportunities.
Eyes on the Fed Decision and Trump–Xi Meeting
This week, global investors are focused on the Federal Reserve’s decision on Wednesday and a possible Trump–Xi meeting on Friday or Saturday. On the corporate front, Amazon, Apple, Google, Meta, and Microsoft will report their third-quarter earnings midweek, with investors closely watching their forecasts and commentary. Domestic markets in Turkey will be closed for one and a half days due to Republic Day, with no major data releases expected.
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