While no important data that would direct the markets was followed in the USA this week, concerns that geopolitical tensions in the Middle East might escalate again in the near term continued to fuel inflation fears.
The risk of a new conflict in the region and already high transportation costs pushed oil prices up. The barrel price of December delivery Brent oil approached 117 dollars.
With the expectation that the increase in energy costs could strengthen inflationary pressures, forecasts regarding the monetary policy steps of central banks continued to remain hawkish.
Concerns have increased around the world that high borrowing costs may negatively affect artificial intelligence investments, which are the driving force of economic growth.
For this reason, while there was selling pressure in technology stocks, especially chip companies, throughout the week, the total market value of global stock markets lost over 1 trillion dollars.
Analysts stated that the basis of the concerns regarding the financing of artificial intelligence investments is that although the investments reach very high costs, it is unclear how long and to what extent these expenditures will turn into profit, and noted that this situation causes fluctuations especially in the stocks of semiconductor, data center and cloud computing companies.
Stating that increasing borrowing costs globally make it more expensive to establish data centers or increase capacity, analysts said that as a result, the interest expenses of companies that finance their investments with debt increase and the economic attractiveness of new projects decreases.
As the election agenda in the USA heats up, concerns that US President Donald Trump may increase military pressure on Iran after the elections on November 3 are leading to a re-pricing of a possible conflict in the markets.
While all eyes will be on the interest rate decisions of leading central banks, especially the US Federal Reserve (Fed), next week, the markets are expected to keep the policy rate constant.
In addition, the balance sheets of Amazon, Microsoft and Alphabet will be followed in the balance sheet season, which accelerates with growth and personal consumption expenditure data in the USA.
The general decline in technology and artificial intelligence-related company stocks directed investors to safe haven assets. With these developments, the US 10-year bond interest rate fell below 5 percent for the first time in about a month on Thursday.
The US 10-year bond yield completed the week at 5 percent, with a decrease of 8 basis points. The dollar index closed the week horizontally at 101.8.
Predictions that interest rates may remain high due to tensions in the Middle East continued to pressure gold. The ounce price of gold reached below 4 thousand dollars for the first time in about 3 months on Friday. An ounce of gold dropped by 4.1 percent on a weekly basis to $3,995. The barrel price of December delivery Brent oil completed the week at 116.9 dollars, with an increase of 6.5 percent.
New York stock market was mixed
Stock markets in the USA were mixed this week. On a weekly basis, the S&P 500 in the New York Stock Exchange decreased by 0.47 percent, the Nasdaq index decreased by 0.71 percent, while the Dow Jones index increased by 0.41 percent.
As the balance sheet season continues, Meta announced its balance sheet for the July-September period of 2026. Accordingly, the company's revenue increased by 26 percent in the third quarter compared to the same period last year, reaching 64.6 billion dollars. Meta earned $51.2 billion in revenue in the same period last year.
Meta's net profit increased by 264 percent in the third quarter of this year, reaching 9.9 billion dollars. The company announced a net profit of $2.7 billion in the same period last year.
The net profit of the American electric car manufacturer Tesla decreased by 43 percent in the third quarter of the year compared to the same period last year, falling to 787 million dollars. Tesla's net profit was recorded as 1.4 billion dollars in the same period last year.
The company's revenue reached 28 billion dollars in the third quarter of the year, remaining unchanged compared to the same period last year.
Next week, Chicago Fed national activity index, Dallas Fed manufacturing industry index, durable goods orders, new home sales, Dallas Fed service sector index, Conference Board consumer confidence index, Richmond Fed manufacturing industry index, Fed interest rate decision, Fed President Kevin Warsh's speech on Wednesday, personal consumption expenditures (PCE) price index and growth data will be followed on Thursday.
European stock markets were negative
European stock markets were down due to geopolitical concerns and the risk that the events in France would spread throughout the region. As the intensifying street protests in France endangered public finances, the selling pressure on French government bonds deepened.
The country's 10-year bond interest rate rose to 5.07 percent, the highest level since 2002. In addition, for the first time since 2013, France's 10-year bond rate exceeded the US 10-year bond rate.
Next week, the interest rate decision of the European Central Bank (ECB) and the balance sheets of leading banks, aviation and retail companies will be followed in the region.
The ECB is expected to keep the three main policy rates constant at its meeting next week. However, expectations that the ECB may increase interest rates in subsequent meetings remain strong due to high oil prices and inflation risks.
On the macroeconomic data side, the Producer Price Index (PPI) for September in Germany increased by 1.9 percent monthly and 6.7 percent annually, above expectations, and accelerated compared to August. PPI in the country recorded its fastest increase on an annual basis since March 2023.
SAP, one of Europe's largest technology companies, exceeded expectations in its third quarter balance sheet. The company's quarterly revenue exceeded 10 billion euros. The company predicted 2026 revenues would be in the range of 36.3 billion to 36.8 billion euros.
With these developments, on a weekly basis, the FTSE 100 index in the UK fell by 1.76 percent, the DAX index in Germany by 1.84 percent, the CAC 40 index in France by 2.19 percent and the MIB 30 index in Italy by 2.60 percent.
In the week that will start on October 26, the IFO business confidence index in Germany will be followed on Monday, the consumer confidence index in Germany on Wednesday, the ECB interest rate decision on Thursday, the speech of ECB President Lagarde, the consumer confidence index in the Eurozone, the growth in the Eurozone on Friday, and the inflation data in Germany.
BoJ's interest rate decision is expected in Asia
In light of the current developments, Asian stock markets were also on the decline, while the regional markets fell, led by the semiconductor industry.
On the other hand, the rise in oil prices as a result of tensions in the Middle East increases energy costs and inflation concerns. This situation continues to be a negative factor, especially for Asian economies dependent on energy imports.
In addition, high inflation and the possibility that interest rates will remain high for a long time are suppressing the valuations of growth-oriented technology stocks.
Inflation in Japan was 2.1 percent on an annual basis in September, in line with expectations. Core inflation in the country rose above 2 percent in September for the first time in 9 months.
Exports in Japan increased by 16.7 percent in September, remaining below expectations and slowing down compared to August. The increase in Japan's exports was driven by strong demand for semiconductors and artificial intelligence products.
The interest rate decision of the Bank of Japan (BoJ) will be followed next week. Market expectations are shaping up to be that the bank will not change the policy rate at this meeting.
With these developments, on a weekly basis, the Kospi index in South Korea decreased by 2.08 percent, the Hang Seng index in Hong Kong decreased by 4.52 percent, the Nikkei 225 index in Japan decreased by 4.03 percent and the Shanghai composite index in China decreased by 0.69 percent.
BoJ interest rate decision and Tokyo CPI data will be followed on Friday next week.
Interest rate reduction step by CBRT after 5 meetings
The BIST 100 index at Borsa Istanbul, which is predominantly sales-oriented domestically, closed at 11,116.99 points, with a decrease of 5.16 percent on a weekly basis.
On the other hand, the Central Bank of the Republic of Turkey (CBRT) Monetary Policy Committee (PPK) reduced the one-week repo auction interest rate, which is the policy rate, by 100 basis points to 36 percent.
In addition, the Central Bank reduced the overnight lending interest rate from 40 percent to 39 percent and the overnight borrowing interest rate from 35.5 percent to 34.5 percent. The Central Bank, which reduced the interest rate in its last meeting in January, thus reduced the policy rate for the first time after 5 meetings.
Meanwhile, the bill containing regulations regarding some investment funds that were decided to be liquidated was accepted in the General Assembly of the Turkish Grand National Assembly.
Accordingly, a seizure decision may be made in accordance with the relevant provisions of the Code of Criminal Procedure (CMK) within the scope of investigations carried out due to acts related to the funds within the scope of the regulation.
For situations that are not covered by the provision titled "Seized and confiscated asset values and recovery calculation", CMB will determine the amount of damage or loss for each fund, the real persons and legal entities responsible for the damage or loss, and the amounts for which they are responsible, taking into account the liquidation procedures and audit and examination results, and notify the Savings Deposit Insurance Fund (TMSF).
The amounts accumulated in the recovery account, after deducting the mandatory expenses, will be transferred by the Savings Deposit Insurance Fund (TMSF) to the institution responsible for liquidation, and if the liquidation is completed, it will be transferred to the Investor Compensation Center (YTM) to be paid to the fund shareholders notified by the CMB. YTM will make payments in proportion to the participation share ownership.
Dollar/TL also completed the week at 49.6940, 0.4 percent above the previous weekly closing.
Next week, domestic unemployment rate data on Tuesday and foreign trade balance data on Wednesday will be followed.
Domestic markets will be traded for half a day on Wednesday, October 28, and will be closed on Thursday due to Republic Day, October 29.
