US-China Trade Tensions, Nvidia Earnings, and Inflation Data to Shape Global and Israeli Markets This Week
Investors worldwide, including in Israel, face a volatile trading week amid high market risks. US government bond yields remain near multi-decade highs despite Treasury interventions, oil prices are rising, and a new trade dispute has erupted between the US and Canada with reciprocal tariffs imposed over the weekend. Heightened geopolitical tensions in the Middle East, including recent Israeli strikes in Syria and ongoing conflicts with Gaza and Lebanon, add to market uncertainty.
Key events this week include Nvidia's earnings report on Wednesday, which will test the strength of AI and semiconductor sectors amid exceptionally high market expectations. The same day, the US will release the Personal Consumption Expenditures (PCE) inflation report, the Federal Reserve's preferred inflation gauge. On Friday, Fed Chair Kevin Warsh will deliver his first speech at the annual Jackson Hole monetary policy symposium, closely watched amid rising long-term bond yields and Treasury market interventions.
In Israel, the local stock market showed mixed results last week, with the TA-35 index down 0.7% and the insurance sector surging 5% following strong financial results from Clal Insurance. Technology stocks fell sharply, led by Kamtek and Nova, which dropped over 10%. Dual-listed Israeli stocks on Wall Street declined overall, with Kamtek and Nova losing more than 3%. Meanwhile, global markets closed lower, with the Nasdaq down 2% and the S&P 500 down 1.4%, dragged down by semiconductor stocks.
Commodity markets saw notable moves as well. Oil prices rose over 5% following US Treasury warnings of severe sanctions on Iran, with Brent crude closing near $94 per barrel. Gold prices hit a three-month high amid a weaker dollar and easing expectations for imminent US rate hikes. Bitcoin surged over 20% to around $76,000, fueled by US Treasury bond purchases, regulatory clarity efforts, and technical breakout levels.
Looking ahead, Israeli macroeconomic data, including labor force survey results due Tuesday, will influence Bank of Israel's interest rate decision expected on September 1. Economists suggest a 60% chance of a rate cut, contingent on stable shekel-dollar exchange rates. Meanwhile, some strategists warn that continued rises in US long-term bond yields could trigger a 15-20% drop in the S&P 500, urging investors to reduce exposure to AI stocks and increase holdings in defensive sectors like healthcare and finance.
Overall, this week’s market direction hinges on Nvidia’s earnings, US inflation data, Fed policy signals, and geopolitical developments, all amid persistent global economic uncertainties.