Global equity markets posted positive yet volatile performance during the week. The S&P 500 and Nasdaq 100 gained 1.7% and 2.5% respectively, while small caps outperformed with the Russell 2000 up 2.4%. The market experienced heightened volatility; the S&P 500 moved more than 2% intraday for the first time since April and the VIX rose above 20.

The week began with a recovery following the prior Friday’s selloff triggered by renewed threats of escalation in US-China trade talks. Sentiment improved early in the week, supported by strong earnings from major US banks and AI bellwethers such as ASML and TSMC. But at the same time, credit concerns resurfaced following comments from financial leaders (incl. Jamie Dimon), writedowns from regional banks on subprime type of loans, and memories of recent bankruptcies in the consumer credit space (First Brancs & Tricolor). Financials briefly weakened but recovered by Friday as Fed Chair Jerome Powell hinted at a possible end to quantitative tightening, boosting housing-linked assets.

In Europe, under owned luxury names rallied after LVMH less-negative earnings, reigniting interest in China-exposed stocks. Though the MSCI China index fell 3.9% amid weakness in Chinese tech. Dutch government’s seizure of Nexperia highlighted ongoing geopolitical frictions in chip supply chains.

Lingering macro / geopolitics / credit concerns and elevated volatility kept investors cautious. Defensive sectors such as healthcare, utilities, and gold attracted renewed interest. Consumer and real estate sectors benefited from easing oil prices and a 5 bp decline in 10-year Treasury yields. But at the same time, retail investors continued to “buy the dip” signalling optimism, and technology sector maintained leadership supported by record ETF inflows.

The S&P 500 and Nasdaq appear to be consolidating, suggesting stabilisation ahead of what is typically a seasonally strong quarter for equities. Overall, the week reflected a complex mix of macro and sector dynamics, with resilient sentiment setting up a potentially strong earnings season ahead.