Market Turmoil: US Inflation Data Eagerly Awaited

Market Tensions and Fed Chairman Powell's Statements

The global markets started the week with a negative outlook due to rising concerns over trade tensions between the United States and China. However, on Tuesday, Federal Reserve Chairman Jerome Powell's dovish comments somewhat supported the markets by increasing risk appetite. Macroeconomic data released mid-week and President Donald Trump's signals of easing tariffs on China triggered a recovery in global markets.

Questions in the Banking Sector

As the week progressed towards the final trading days, growing concerns about the United States banking sector complicated market pricing. Regional banks like Zions Bancorp and Western Alliance announced they detected fraud cases in some loans. Zions Bank reported to the SEC that there were irregularities in two commercial loans and that it recorded a loss of 50 million dollars. Western Alliance filed a lawsuit against a borrower due to fraud allegations.

Optimistic Signals from Trump

These developments negatively affected risk appetite due to the uncertainty they created in the markets. However, on Friday, Zions’ shares increased by approximately 6%, while Western Alliance’s shares rose by 3%. Analysts emphasized that despite current concerns, the banking sector in the United States remains robust, stating that a systemic crisis is not anticipated.

Focus on Inflation Data

During the government shutdown in the United States, inflation data was postponed. The data expected to be released this week will play a critical role in the Fed's future policy decisions. Fed Chairman Powell's statements suggested that inflation is still rising and there are downside risks in the labor market. This situation increased expectations for interest rate cuts by the Fed in the markets.

Weekly Market Performance

In the New York stock market, the S&P 500 increased by 1.70%; the Nasdaq rose by 2.46% and the Dow Jones index was up by 1.56%. Meanwhile, Brent oil closed the week with a 1.40% loss at 61.2 dollars, while the dollar index fell by 0.6% to 98.4.

Especially, gold prices reached an all-time high of 4,379.42 dollars and finished the week at 4,250 dollars with a 5.80% increase. The silver spot price also reached a record of 54.71 dollars.

Domestic Developments

In the domestic arena, all eyes are on the Central Bank of the Republic of Turkey (TCMB) interest rate decision on October 23. Most economists expect a cut of 100 basis points in policy. The Treasury and Finance Minister Mehmet Şimşek provided positive signals regarding the Turkish economy on international platforms, emphasizing the need to accelerate structural reforms.