Ali Canberk Ozbugutu
26 June 2026•Update: 26 June 2026
Risk aversion increased in global markets amid concerns that rising costs in technology and artificial intelligence (AI) sectors could weaken end-user demand, despite the persistent optimism in markets over the potential of lasting peace in the Middle East.
Energy-driven inflation risks are shifting towards the digital sector amid increasing chip demand in the AI and tech sectors. Forecasts show price pressures due to excess demand could make it harder for end users to access digital products, fueling concerns that the profitability of AI and tech companies could suffer.
For example, Apple raised prices across its product lineup due to high chip costs.
The US’ Personal Consumption Expenditures (PCE) price index, which the Fed uses as its inflation benchmark except for food and energy, rose 0.3% month-on-month and 3.4% year-on-year in May, within estimates. The annual increase reached its highest since October 2023.
Core PCE data showed a rise in line with expectations. Analysts say it did not signal a significant forward-looking deterioration in pricing behavior despite high oil prices in April and May, leading to estimates of a potential slowdown in oil-driven inflation in the coming period.
The Fed’s likelihood to hike rates twice by year-end eased following the release of these indicators, while forecasts for a September rate hike shifted towards October.
The US economy grew 2.1% year-on-year in the first quarter, while the number of initial jobless claims fell 12,000 to 215,000 in the week ending June 20, which was below estimates.
Durable goods orders fell 4.5% in May, lower than expected.
Reports that Iran will charge fees to ships transiting the Strait of Hormuz have also surfaced.
US and Gulf Cooperation Council (GCC) foreign ministers said any attempt to charge fees for passage would be unacceptable, urging the parties to continue negotiations to reach a final deal.
UK Maritime Trade Operations reported that a ship came under attack near the Strait of Hormuz for the first time since the US-Iran peace deal.
The downward trend in oil for the past few days reversed on Thursday as Brent crude rose 2.1% to $74.96 per barrel, while trading down 1.2% at $74.1 on Friday.
The US 10-Year Treasury yield fell around 3 basis points on Thursday to 4.36%, its lowest since May 8, yet it is trading flat on Friday.
The US Dollar Index is down 0.1% at 101.3 on Friday.
Gold declined 0.4% to $4,009 per ounce on the same day.
The S&P 500 traded flat, while the Nasdaq fell 0.46% and the Dow Jones rose 0.14% on Thursday. American indexes started Friday in negative.
At the same time, risk appetite rose in Europe amid falling oil prices reducing risks to growth and inflation, as the bloc’s inflation-recession dilemma eased amid optimism over energy prices potentially declining.
The US Supreme Court’s ruling in favor of Bayer in the Roundup weed killer case fueled expectations that legal risks would be reduced. The decision was followed by a near 19% jump in Bayer’s shares, reaching the highest level since mid-February.
France and Italy reportedly decided to boost their cooperation across many fields, including defense and energy.
The UK’s FTSE 100 climbed 0.65%, France’s CAC 40 0.55%, Germany’s DAX 40 1.03%, and Italy’s FTSE MIB 30 0.28% on Thursday. European indexes opened Friday negative.
Selling pressure has surfaced in Asia especially due to its AI and tech sectors.
Tokyo’s inflation rate came in at 1.7%, above estimates, reinforcing expectations that the Bank of Japan (BoJ) will maintain its hawkish stance with at least a single rate hike by the end of the year.
The US dollar/Japanese yen exchange rate rose to its 40-year high at 161.95 before slowing amid expectations that Japanese authorities may intervene. The exchange rate is currently down 0.1% at 161.63 on Friday.
Near the close, Japan’s Nikkei 225 fell 4.5%, South Korea’s Kospi Index 6.9%, China’s Shanghai Composite Index 1.7%, and Hong Kong’s Hang Seng Index 1.9%.
*Writing by Emir Yildirim
