Most Asian stock indices were positioned for weekly losses on Friday as persistence in global bond market selling and rising oil prices influenced investor sentiment. The Nikkei fell 0.8%, bringing its weekly loss to 4.0%, while Chinese blue chips dipped 0.1%. While South Korean and Taiwanese markets saw slight gains on Friday, both remained down for the week. In the United States, S&P 500 futures rose 0.1% following a corporate earnings season that has offered some support to valuations.
U.S. Treasury yields rose again after a brief period of relief following a surprise intervention by the U.S. Treasury Department on Wednesday. Treasury Secretary Scott Bessent stated he could increase government debt buybacks further and suggested potential fiscal consolidation. However, analysts expressed skepticism regarding the feasibility of spending cuts sufficient to address a budget deficit exceeding 6% of gross domestic product, noting that interest payments alone have reached $1.2 trillion this year.
In commodities, Brent crude oil prices reached a one-month high of $94.71 before settling at approximately $93.12 per barrel, marking a weekly increase of more than 5%. The price rise followed warnings from the U.S. government regarding "economic warfare" and the potential for "the toughest sanctions in history" against Iran. These geopolitical tensions have reduced expectations for a diplomatic resolution that would fully reopen the Strait of Hormuz, a critical maritime passage.
Energy consumers at the gas pump will also notice the impact of the 5% weekly rise in oil prices, driven by the diplomatic deadlock in the Gulf. With Brent crude surpassing $93 per barrel, households may see a corresponding increase in fuel and heating costs. Furthermore, the U.S. dollar has dropped nearly 0.9% this week against a basket of currencies as investors weigh the impact of debt levels on the currency's purchasing power. This trend has pushed gold prices to $4,513 an ounce, a 3.1% weekly increase, as investors seek assets perceived as scarce.
Looking ahead, the technology sector faces a significant test next week when Nvidia reports its earnings, which will provide data on the demand for artificial intelligence infrastructure. In Japan, recent data showing accelerated core consumer inflation in July and a surge in manufacturing orders has increased the likelihood of a September interest rate hike by the Bank of Japan. Markets have already priced in a quarter-point increase to 1.25%, though investors are awaiting signals regarding the pace of future tightening. In the U.S., the Treasury’s shift toward more frequent market interventions remains a point of focus for institutional investors monitoring government credibility.