Wall Street: Stability amid renewed exploration of interest rate expectations

The US trading week closed on a balanced note, with the NASDAQ climbing 0.31% and the S&P 500 up 0.19% for the week. Investors continued to price in a high probability of monetary easing during 2025, but the Fed’s stance remained cautious. The yield curve stabilized, giving the market breathing room and strengthening growth-oriented sectors.

At a deeper level, midweek volatility was driven primarily by profit-taking in large tech stocks, alongside a modest recovery following solid macro data. Investors continue to adopt a “calculated risk-on” strategy — not a sideways run into risky assets, but gradual exposure in line with macro signals.

Overall sentiment remains supportive, but without the catalyst needed for further acceleration, which places Wall Street in a kind of “positive tension” ahead of inflation data and upcoming Fed meetings.

Europe: Positive momentum in Germany and stability in the UK

The continent concluded a mixed week. The German DAX index rose by about 0.61%, supported by a recovery in the manufacturing and automotive sectors. The Euro Stoxx 50 index also recorded a slight increase of about 0.10% on a weekly basis, despite pressure in the financial sector.

In contrast, the UK FTSE 100 ended the week down about 0.45%, as investors in the UK grappled with concerns about renewed inflationary pressures and expectations of a slowdown in domestic consumption. The gap between the performance of the indices in Europe highlights the economic diversity between the bloc’s countries, with Germany enjoying relatively positive sentiment compared to a slowdown in the UK.

Europeans are now focusing on expected inflation data and signals about the ECB’s direction, amid internal disagreement over when to begin interest rate cuts.

Asia: Impressive rally in Korea, recovery in Hong Kong and decline in Tokyo

Asia was the center of power this week. The  South Korean KOSPI index jumped by about 1.78% in a weekly summary , and in the last five days it climbed by even about 4.58% according to the graphic reports. The momentum stemmed from increased demand for chips, progress in regional AI projects, and the strengthening of the won. Investors have re-identified Korea as a target for positive allocation in emerging markets.

The Hang Seng Index  in Hong Kong added about 0.58% , after a volatile week that opened with sharp declines, but ended with bullish momentum thanks to the return of Chinese investors to the market, and expectations of regulatory intervention that will stabilize local real estate.

In contrast,  Japan’s Nikkei index fell by about 1.05% , erasing its run to record levels. The reversal stemmed from concerns about further strengthening of the yen and a localized overvaluation of the robotics sector. Japan did enjoy positive dynamics throughout 2024–2025, but the rapid rise left the market vulnerable to a healthy correction.

Israel: Strong week in Tel Aviv with local excess returns

The Tel Aviv Stock Exchange stood out compared to Western markets.
The TA-125 index rose by approximately 2.35% during the week , and the TA-35 jumped by approximately 2.79% , with institutional and foreign funds continuing to return to the local market against the backdrop of a decline in geopolitical risk spreads.

The leading sectors were banks and technology, which benefited from increased demand and a sense of relative macro stability. Investors are embracing a “return to normalcy” narrative in anticipation of interest rate updates in Israel in early 2026.

The important thing is that the local market exhibited positive dynamics both in comparison to the US and in relation to Europe, which signals positive differentiation — a phenomenon that has not been seen for many months.

Looking ahead: Investors enter next week with a mix of caution and opportunity

Given the differences between markets, the global picture continues to reflect a gradual shift from a high interest rate environment to a growth-friendly interest rate environment. The market is looking for the next macro catalyst — whether it be inflation data, central bank minutes, or clear signals from the US technology sector.

Investor sentiment continues to stabilize, but focus is expected to shift to monetary policy, forecast updates and the potential for high volatility towards the end of the year. Asian indices are expected to remain in the spotlight as US investors prepare for earnings season and the absorption of upcoming consumer data.