The week exposed a striking split in global markets: the macro backdrop became more difficult, but U.S. equities barely moved, while several international markets absorbed much larger declines. The contrast was especially visible in Israel, where the TA-35 gained 2.18% and TA-125 rose 3.46%, against declines in major European and Asian benchmarks.

U.S. Markets Hold Near the Starting Line

Wall Street finished the five-session period with limited net movement. The S&P 500 gained 0.09%, Nasdaq Composite gained 0.40%, Russell 2000 gained 0.11%, while the Dow Jones Industrial Average fell 0.27%. The narrow spread matters: markets absorbed higher oil prices, elevated Treasury yields and shifting Federal Reserve expectations without producing a broad equity selloff. Friday’s stronger-than-expected August employment report added another layer, with 162,000 jobs created and unemployment at 4.1%, reinforcing expectations that monetary policy could remain restrictive for longer.

Rates, Oil and the Dollar Reshape Global Leadership

The U.S. Dollar Index fell 0.27% for the week, even as geopolitical and inflation concerns pushed bond yields higher at points during the period. Oil was a major macro variable after renewed U.S.-Iran hostilities drove Brent toward a six-week high and put fresh pressure on inflation expectations. That combination helps explain why equity performance became increasingly regional: markets with greater sensitivity to energy costs or global manufacturing demand faced more pressure, while U.S. large-cap equities remained relatively resilient.

Europe and Asia Show Wider Dispersion

Europe ended weaker overall. The DAX fell 1.97%, CAC 40 declined 1.46% and MSCI Europe slipped 0.14%, while the FTSE 100 gained 0.36%. The pattern reflects different exposures to energy prices, fiscal concerns and interest-rate expectations. In Asia, the Nikkei 225 fell 1.95%, KOSPI declined 1.95% and Shanghai’s SSE Composite fell 0.56%, while the Hang Seng gained 0.26%. South Korea’s rebound on Friday was supported by easing rate-hike expectations and strong semiconductor performance, but it was not enough to erase the week’s decline. Japan remained sensitive to yen movements and global rate expectations, while Hong Kong showed greater resilience.

Israel Decouples From the Global Weakness

Tel Aviv delivered the strongest performance among the major benchmarks shown. TA-35 gained 2.18%, while TA-125 gained 3.46%, extending the market’s relative strength despite global pressure from energy prices and interest rates. Friday’s advance was broad, with real estate, technology and communication stocks among the stronger areas. The weekly result suggests that local positioning and sector composition provided a buffer against the international risk-off tone; however, the supplied index data alone do not establish that banks, defense shares or institutional flows were the primary drivers.

The next week brings a sharper macro test. U.S. producer prices are scheduled for September 10, followed by the August CPI report on September 11, while the ECB is due to decide policy on September 10. After the strong U.S. jobs report, those inflation readings will help determine whether markets continue to price a more restrictive Federal Reserve path. For equities, the key question is whether the U.S. market’s resilience can persist if inflation and energy costs keep rates elevated, or whether the divergence between Wall Street, Europe, Asia and Tel Aviv begins to narrow.