The Nasdaq Composite reached a new record high during Tuesday’s session, even as the Dow Jones Industrial Average slipped and the S&P 500 went nowhere. Beneath the headline indices, the picture was far from uniform: financials dragged, materials and consumer staples held up well, and investor sentiment remained sensitive to interest rates, inflation and geopolitical risks. Oil prices, meanwhile, fell for a sixth straight session on growing hopes of a US and Iran settlement, and markets across Asia turned cautious ahead of a closely watched meeting between President Donald Trump and President Xi Jinping.
Global market wrap
US equities split between tech strength and financial weakness
The Nasdaq Composite added 0.5% to finish at 27,244, reaching a new record high during the session. The S&P 500 ended the session essentially flat at 7,765, while the Dow Jones Industrial Average lost 0.4% to settle at 51,864.
Sector performance was uneven. Materials were among the best performers and consumer staples also gained ground, while financials posted the steepest losses. Energy and communication services also finished lower. The divergence points to a market that is still underpinned by a healthy economy and upbeat earnings expectations, but one where investor sentiment remains sensitive to developments in interest rates, inflation and geopolitical risks. The continued strength of the technology sector was particularly evident in the Nasdaq’s advance.
US economy and Treasury yields
Economic data continues to offer support. Private sector employers in the US added an average of 20,000 jobs per week in the four weeks to 5 September, an improvement on the previous reading. The unemployment rate is holding at a relatively contained 4.1%, and the number of job openings still exceeds the number of people out of work, a sign that demand for labour remains solid.
The recent drop in oil prices has taken some pressure off inflation expectations, although geopolitical tension and uncertainty over crude supply remain live risks. Treasury yields were little changed, with the 10 year yield sitting close to 4.96%, so overall financial conditions were broadly steady. Overall, US equities continue to benefit from resilient economic activity and corporate earnings, although stretched valuations, uneven market breadth, the path of interest rates and events abroad all remain on investors’ radar.
Asian markets and US futures
Trading in Asia was mixed on Wednesday as investors held back ahead of the expected Trump and Xi meeting. South Korea’s KOSPI edged up 0.2%, while Chinese and Hong Kong shares weakened, with the Hang Seng down 0.9%. Australian equities were little changed and futures for India’s Nifty pointed to a quiet start.
US index futures were largely flat overnight. S&P 500 and Dow Jones futures were unchanged, while Nasdaq 100 futures gained 0.17%. Caution around the US and China summit was partly balanced by reports of renewed dialogue between Washington and Tehran, together with continued enthusiasm for artificial intelligence.
European equities extend their gains
European stocks built modestly on the previous session’s strong rally. The STOXX Europe 600 rose 0.3% and the Euro STOXX 50 added 0.2%. Technology was the standout sector, with ASML, Infineon and Siemens Energy climbing by as much as 2.5%. Prosus surged 4.6% and Inditex advanced 3%, while banks and insurers lost ground.
Currencies: dollar holds firm
The US dollar stayed strong, with the dollar index hovering near 100.5 after hawkish Federal Reserve commentary strengthened expectations of further rate hikes. EUR/USD traded around 1.1428, leaving the dollar close to its firmest level in several weeks against the single currency. Lower oil prices and progress in US and Iran diplomacy have, however, reduced some of the demand for safe haven assets.
Oil prices fall for a sixth session
Crude extended its losing streak to six sessions. Brent slipped 0.8% to $98.45 per barrel and WTI fell 1.1% to $89.55. Signs of diplomatic progress between Washington and Tehran, together with a better outlook for crude flows from the Middle East, weighed on prices. Saudi Arabia has also restarted its East West pipeline, calming supply worries.
On the diplomatic front, President Trump said the US and Iran could strike a deal after the November midterm elections, while repeating that Iran must not be allowed to acquire a nuclear weapon. Iran has reportedly proposed reopening the Strait of Hormuz within seven days, in exchange for US military de-escalation and negotiations towards a lasting settlement.
Companies in focus
The following companies saw share price moves driven by analyst ratings, quarterly earnings or other news.
DeepSeek and Moonshot AI face Chinese data probe
China’s internet regulator has opened an investigation into DeepSeek and Moonshot AI over claims that sensitive user data was sent to Anthropic’s Claude models without authorisation. The probe follows a report by Anthropic alleging that seven Chinese companies made extensive use of Claude, including allegations involving data linked to Chinese state, police and military bodies. Company representatives have been questioned.
Palo Alto Networks launches AI security service
Palo Alto Networks is rolling out a cybersecurity service powered by AI models from Anthropic and OpenAI, designed to scan corporate systems for vulnerabilities on a continuous basis. The service will test web applications, APIs and cloud infrastructure, map out potential attack paths and suggest remedies. It will be sold worldwide on annual subscriptions, with pricing linked to the models used.
Apple tests a screenless fitness tracker
Apple is reportedly working on a health and fitness band without a screen, similar in concept to Whoop’s wrist worn tracker, and prototypes are already in testing. The project is still at an early stage and no final decision on a launch has been made. Should it go ahead, the product is not expected before 2028, and would widen Apple’s range of wearables.
TUI narrows its earnings guidance
TUI has tightened its full year underlying EBIT guidance to a range of €1.2 billion to €1.3 billion, helped by robust holiday demand and a pick-up in airline bookings. The travel group said its hotels and cruises continue to trade well, although late airline bookings and geopolitical uncertainty mean it is managing capacity cautiously. Revenue guidance remains suspended.
On Holding sets 2029 targets and a $1 billion buyback
On Holding is aiming for sales of at least CHF 5.6 billion by 2029, which implies annual growth in the high teens. It is targeting gross margins above 65% and an adjusted EBITDA margin of 22%. The group also approved a $1 billion share buyback, announced plans to move into football and golf, and reaffirmed its strong growth guidance for 2026.
Novo Nordisk open to acquisitions
Novo Nordisk’s new chief executive said the company is willing to pursue acquisitions to bolster its weight-loss pipeline and fill gaps in areas such as cardiovascular disease. The remarks come as investors worry about mounting competition, looming patent expiries for Wegovy and Ozempic, and fading confidence in the group’s growth outlook. CagriSema remains an important launch on the horizon.
European drugmakers call for more support
Europe’s pharmaceutical industry is pressing governments to raise spending on medicines, speed up clinical trials and reinforce intellectual property protection, warning that the region is falling behind the US and China. The sector argues that Europe’s share of global drug research and development has dropped significantly, and that slow approvals, reimbursement and patient access are deterring investment.
Mizuho sees momentum in Meta’s AI strategy
Mizuho said Meta’s AI push is gaining ground, pointing to fast take-up of its Muse AI agent ahead of the Meta Connect event. The broker expects Connect to showcase how Meta is linking AI, wearables and commerce, and believes the Connector Platform could open up transaction-based revenue. Mizuho also flagged possible disruption to advertising in search, travel and e-commerce.
Rosenblatt starts Sandisk at Buy
Rosenblatt began covering Sandisk with a Buy rating and a $2,400 price target, arguing that AI is making NAND memory an increasingly essential part of computing infrastructure. The broker believes the BiCS8 and BiCS10 platforms could deliver cost and performance advantages, while agreements with large customers may give better visibility on demand and dampen the volatility the sector has historically seen.
RBC downgrades LVMH
RBC cut LVMH to “sector perform” and lowered its price target to €475 from €575, pointing to softer luxury demand and a difficult economic environment. The broker reduced its 2027 earnings per share estimate by 10% and now forecasts organic revenue growth of 3.1%, with weaker results in Fashion and Leather Goods. It noted that LVMH’s high fixed cost base increases its earnings sensitivity.
Bernstein upgrades Engie to outperform
Bernstein raised Engie to “outperform”, citing an attractive valuation after the recent fall in the share price. Although it trimmed its price target to €27.70, the broker lifted its 2026 earnings forecast to the upper end of company guidance. It sees potential upside from higher regulated returns, firmer power prices and stronger contributions from flexible generation, storage and energy management.
Deutsche Bank lifts Danone to hold
Deutsche Bank upgraded Danone to “hold” from “sell” and kept its price target at €61, arguing the valuation is now lower after a 21.4% share price fall so far this year. The broker said trends in US essential dairy remain weak and channel shift pressures persist, although improving non milk dairy employment and steadier brand search data point to some signs of recovery.
Upcoming data and events
Wednesday’s calendar is led by flash manufacturing and services PMIs for Germany, the UK and the US, which will give a first read on business activity in September. The US also publishes MBA mortgage applications and the EIA’s weekly oil inventory figures. Investors will follow a scheduled Federal Reserve speech and US Treasury auctions, alongside the UN General Assembly.
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