Equity Weekly 4 11 September 2026

Sy z E qu i ty R e se ar c h – we ek f ro m 4 t o 1 1 S e pt e m be r 202 6

The Chart of the Week MSCI World and the US 10-year bond yield both continue to trend higher

What happened last week? Global markets

Global equities retreated during the week ending on 11 September 2026, with the MSCI ACWI down 1.0% as a cluster of inflation and geopolitical shocks outweighed a still-resilient AI capex narrative. The week opened against a backdrop of a stronger-than-expected August US payrolls report released on the prior Friday close that anchors this period, which had already begun to temper hopes for near-term Federal Reserve easing. From there, sentiment deteriorated further as Brent crude pushed toward $100 a barrel on renewed Middle East hostilities, including reported strikes on Saudi energy infrastructure, at the same time as a US-Canada trade dispute escalated into retaliatory tariffs on both sides of the border. The combination revived the inflation scare that has periodically unsettled markets this year, and it showed up directly in the data: a hotter-than-expected August producer price report on Thursday and an August CPI print on Friday that came in mostly in line at the headline level but hotter on core, alongside a soft reading on consumer sentiment and rising inflation expectations.

Both value and growth indices fell in tandem (MSCI ACWI Value and Growth both down roughly 1%), underlining that this was a broad risk-off move rather than a rotation between styles. But emerging markets performed notably better. Nearly every major developed market fell, while MSCI EM rose 1.1%, helped by a powerful rally in Korean equities tied to memory-chip demand. Within Europe specifically, the STOXX Europe 600 pulled back -1.6%, as European equities absorbed both the oil shock and a hold from the ECB.

Sector performance reflected this cross-current: energy was one of the few pockets of strength globally as oil rallied, while sectors sensitive to real rates and growth expectations - healthcare, materials, consumer discretionary and construction - underperformed. Within technology, the picture was split: semiconductor names broadly rallied on continued AI infrastructure demand and a rotation toward memory suppliers, even as some of the largest AI beneficiaries of the past two years lagged.

The S&P 500 fell 1.1% and the Nasdaq 100 fell 0.4% during the week. The more domestically oriented Russell 2000 index fell 2.1%, underperforming alongside the Dow (-2.1%). Breadth was notably weak - the equal-weighted S&P 500 fell 2.4%, nearly double the headline index's decline, pointing to concentration in the handful of names still holding the market up. Healthcare was the worst-performing sector by a wide margin, down 4.5%. The trigger was Novartis' two consecutive drug trial failures, which drove heavy selling in US-listed peers with competing or adjacent pipelines, including Amgen, Sarepta and Dyne Therapeutics, compounded by company-specific setbacks at Stryker and Boston Scientific. Financials, materials and consumer discretionary also lagged, while technology and energy were the only sectors to post gains.

Within technology, the divergence was stark. Semiconductors rallied hard (+5.0%), led by AMD and Intel, as investors rotated toward chipmakers seen as direct beneficiaries of the memory supercycle rather than pure GPU exposure; Dell also surged to a record high on a bullish broker initiation. Nvidia bucked the group, falling 4.3% amid a shift in investor attention toward memory suppliers. Oracle reported strong quarterly results but sold off regardless, as investors focused on the rising capital intensity of its cloud build-out rather than the beat itself. Meta was the standout Magnificent Seven performer, up 6.1% helped by the successful launch of Muse - a standalone personal AI agent. Markets ended the period on a firmer note Friday, snapping a multi- day losing streak, but remained cautious heading into next week's FOMC meeting.

European equities declined, with the STOXX Europe 600 down 1.6% in local-currency terms. The DAX (-1.8%) and CAC 40 (-1.2%) both fell, while the FTSE MIB was a rare bright spot, up 0.7%. The most significant…