Contents
Market review
Risk assets generally remained resilient amid a low volume week. US equities continued to push towards record highs, supported by strong AI-related earnings and easing concerns around near-term policy tightening. The S&P 500 and Nasdaq were buoyed by semiconductor and AI infrastructure stocks, while European equities remained close to record levels, benefitting from a broadly constructive earnings season.
Central bank expectations were in focus this week with US July inflation and producer price data broadly in line with expectations, helping reduce the urgency for further Federal Reserve tightening. Markets have somewhat scaled back the probability of a September rate increase following softer inflation and weaker employment data from the non-farm data release last Friday. Elsewhere, the Bank of Japan remains in focus, as persistent wholesale inflation and yen weakness continue to reinforce expectations of policy tightening.
Energy markets and geopolitics continue to be an important source of uncertainty, with oil prices moving sharply during the week, as markets reacted to changing expectations around regional stability and shipping flows. US Energy Secretary Chris Wright stated flows from the strait were almost 7 million barrels a day on a rolling 7-day average, higher than reported statistics. However, the current stand-off between Iran and the US was a factor for higher oil and gas prices and fed concerns around future inflation, particularly in Europe, where the potential for energy-driven price pressures could delay disinflation.
Corporate earnings remained supportive, particularly within technology and AI-linked sectors. Strong updates from AI infrastructure, semiconductor and computing companies reinforced the view that AI-related capital expenditure remains robust. Strong revenue growth from key AI beneficiaries such as CoreWeave and Chinese technology earnings also showed resilient top-line growth despite higher investment spending.
Outlook
The broader backdrop remains constructive, but near-term dynamics are increasingly driven by central bank policy, incoming data, and the resilience of corporate fundamentals. Markets remain reactive to geopolitical flare-ups and the potential for inflation tail risks, and more hawkish policy rhetoric — particularly from the Fed — may tighten financial conditions and drive intermittent volatility. Encouragingly, structural growth drivers remain intact, with earnings expectations broadly resilient and corporate balance sheets holding up.
Movers table
Equities |
1 Week |
YTD |
1 Year |
|---|---|---|---|
S&P 500 |
0.55% |
14.72% |
22.00% |
FTSE 100 |
-0.89% |
11.11% |
21.15% |
Euro Stoxx 50 |
0.51% |
15.29% |
23.31% |
MSCI Asia Pacific ex Japan |
2.47% |
23.46% |
34.14% |
MSCI China |
-2.23% |
-8.38% |
-6.07% |
Source: Bloomberg as at 08:24am on 14/08/2026.
This content has been prepared by M&G Life Investment Office (LIO) for information purposes only and does not contain or constitute investment advice. Information provided herein has been obtained from sources that LIO believes to be reliable and accurate at the time of issue but no representation or warranty is made as to its fairness, accuracy, or completeness. The views expressed herein are subject to change without notice. Neither LIO, nor any of its associates, nor any director, or employee accepts any liability for any loss arising directly or indirectly from any use of this document. The value of investments and any income from them may go down as well as up and are not guaranteed. Investors may get back less than the original amount invested and past performance information is not a guide to future performance.
‘M&G Life Investment Office (LIO)’ includes the team formerly known as Prudential Portfolio Management Group (PPMG), Prudential Portfolio Management Group Limited, is registered in England and Wales, registered number 2448335.
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