Global markets faced a difficult week as an AI-led selloff, mixed bank earnings and stronger-than-expected inflation data weighed on investor sentiment.
The S&P 500 and Nasdaq were set to post weekly losses, while the Dow Jones Industrial Average remained on track for a weekly gain.
The S&P 500 had earlier fallen 1.11 per cent to 7,718.94, its biggest one-day drop since July 29, while the Nasdaq fell 1.88 per cent to 26,692.87.
The Dow closed at 51,621.48 in that session, down 0.09 per cent, showing relative resilience compared with technology-heavy indices.
Hotter-than-expected US consumer and producer inflation reports confirmed that price pressures were broadening beyond energy products.
US consumer prices rose 0.6 per cent in September, taking annual inflation to 3.7 per cent, while core inflation rose 0.3 per cent month-on-month.
Markets increasingly expected the Federal Reserve to keep interest rates unchanged at its October 27-28 meeting, though uncertainty over a possible hike persisted.
Federal Reserve Chair Kevin Warsh said the US economy remained resilient, supported by AI-driven investment, but did not prejudge the next rate decision.
Brent crude remained above 100 dollars a barrel, although a nearly one per cent decline in oil prices on Friday offered some relief to equity markets.
Elevated energy prices continued to raise concerns about imported inflation, especially for economies dependent on oil shipments through vulnerable maritime routes.
Asian shares mostly rose on Friday and bond markets steadied, reversing some of the previous session’s sharp losses.
South Korea’s KOSPI rose over 3 per cent after an almost 8 per cent fall on Thursday, showing the volatility in technology-heavy Asian markets.
The Philadelphia Semiconductor Index recorded seven straight daily declines through Thursday, reflecting pressure on chipmakers and AI-linked firms.
Investors rotated towards defensive sectors such as healthcare as they reduced exposure to high-valuation technology stocks.
State Bank of India led demand for Reliance Industries’ 130-billion-rupee, roughly 1.35-billion-dollar, 10-year debt sale, highlighting continued appetite for large Indian corporate borrowing.
The UN trade body projected India’s economy to grow 7.3 per cent in 2026, making it a major contributor to global growth despite global headwinds.
The global growth forecast of 2.6 per cent for 2026 reflected the impact of the Middle East energy shock and tightening financial conditions.
The rupee’s near-term direction remained linked to global dollar strength, crude prices and foreign investor sentiment towards Indian equities.
Corporate India’s fundraising activity remained active, with large debt issuances indicating continued confidence among major borrowers and lenders.