The outlook calls for soft U.S. equities amid rising long-term interest rates and economic concerns, while Japanese equities have outperformed the Dow Jones Industrial Average. This market outlook issue organizes the major market trends through the end of September on a fact-based basis.
U.S. equities were soft this week against the backdrop of rising long-term interest rates, with the Dow Jones Industrial Average falling sharply on 28 and 30 September. Rising crude oil prices and the outlook for the Federal Reserve weighed on equity markets, while caution spread over employment- and consumption-related indicators. As of the end of September, the number of JOLTS job openings was below market expectations, and the consumer confidence index also remained low.
In China, concerns about an economic slowdown and policy support were both evident. The Shanghai Composite fell for 3 consecutive days toward the end of September, but rebounded slightly on 30 September. Reforms to the operating framework for monetary policy and stronger fiscal stimulus aimed at expanding domestic demand were reported, while an improvement in business sentiment was also indicated by economic data.
Although the Nikkei 225 was influenced by movements in the Dow Jones Industrial Average, Japanese equities alternated between weakness and rebounds from 28 to 30 September and ultimately finished sharply higher. Futures trading by overseas short-term speculators became an increasingly important market driver, and buying back of bank and insurance stocks was also observed. The rise in the Nikkei 225 was led by some AI- and semiconductor-related stocks, but movements in the TOPIX and a broad range of stocks remained uncertain.