Markets navigated shifting geopolitical tensions, resilient economic data and blockbuster Nvidia earnings, with the AI theme finishing the week back in the driving seat.
Read this article to understand:
- What drove oil and gas prices this week
- Why investors are focusing on where US interest rates might go
- How Nvidia reignited enthusiasm for technology stocks
Markets began the week focused on the Middle East, where tensions around Iran and the Strait of Hormuz had been a major driver of rising oil prices and inflation concerns in recent weeks. However, when the latest US economic measures against Iran proved less aggressive than feared, investors took some comfort.
Reports of possible progress towards reopening the Strait of Hormuz triggered a sharp decline in energy prices
Brent crude retreated from above $94 per barrel and bond markets steadied, with the US ten-year Treasury yield easing back to 4.70 per cent as lower energy prices and reports of additional support for government bonds improved sentiment.
By mid-week, sentiment improved markedly as reports emerged suggesting possible progress towards de-escalation in the Middle East – particularly around reopening the Strait of Hormuz. This triggered a sharp decline in energy prices. Brent crude fell again, by almost nine per cent from the previous Friday, to close around $88 per barrel, and European gas prices retreated.
Bond markets responded enthusiastically, with the US ten-year Treasury yield recording its biggest one-day fall in two months. Investors also reduced expectations that the Federal Reserve (Fed) would need to raise interest rates again in September.
The defining moment of the week arrived on Wednesday evening, with Nvidia’s quarterly results. These have arguably become the most important bellwether for investors. Expectations were already high, yet the company still managed to impress. Revenue guidance once again came in above market expectations, and management projected revenue growth of around 70 per cent for Nvidia’s next financial year.
To put that into context, the company’s sales have risen more than tenfold in just three years, turning Nvidia into possibly the most influential company in global markets. With its revenue doubling over the past year, up by a remarkable 106 per cent, Nvidia once again demonstrated the scale of demand for AI infrastructure. Its shares rose by almost five per cent after the announcement, helping revive investor sentiment across technology markets and underpinning a broader recovery in US equities.1
Yet beneath the excitement around AI, the US economic picture also remained surprisingly resilient. US inflation data showed little evidence of a rapid return to central bank targets. Core inflation remained firm, durable goods orders rose by 1.1 per cent, and consumer spending continued to grow. Employment data also remained robust, with weekly jobless claims falling to just 203,000, reinforcing the view that the US economy remains difficult to slow.
Employment data remained robust, reinforcing the view that the US economy remains difficult to slow
Against this backdrop of stubborn inflation and surprisingly resilient economic activity, investors were searching for hints about the Fed’s next move and its tolerance for ongoing inflation pressures. By Friday, their attention centred on Fed Chair Kevin Warsh’s speech at Jackson Hole, the annual gathering of central bankers held in Wyoming this week. It could shape expectations for the remainder of the year.
For investors, the week ended much where it began. Oil prices remain vulnerable to geopolitical headlines, inflation has yet to fully retreat, and a small number of technology companies continue to do much of the heavy lifting for equity markets. As September approaches, all three will remain firmly in focus.2
Past performance is not a reliable indicator of future results.
References
- The company mentioned is for illustrative purposes only and does not constitute an investment recommendation.
- Source of all the data for this article: Aviva Investors and Bloomberg. Data as of 28 August 2026.
