Global markets opened the week higher on the Middle East peace plan and strong Chinese data

Monday brought a recovery in global markets: US Treasury yields fell, gold rose, and US indices opened higher. Support came from optimism around a new Middle East peace plan and China's Q3 GDP data (+4.5%). European indices, however, opened lower amid protests in France, while the Nikkei 225 fell after statements by Prime Minister Takaichi.

Nilufar KarimovaFirst published on tafs uz 19 October 2026 at 16:302 min read

The key facts

Markets are recovering after last week's decline, driven by hot US inflation, Middle East risks and doubts about the returns on AI investments
China's economy grew 4.5% in Q3, beating expectations; retail sales +1.1%, industrial production +5.5% in September
Brent fell 1.9% to $107.8; the 10-year UST yield dropped to 5.07%, gold rose to $4,183

Recovery after an anxious week

Global markets opened Monday with a recovery amid efforts to develop a new peace plan for the Middle East and positive macro data from China. Last week was tense: US inflation came in above expectations, geopolitical risks intensified, and concerns about the profitability of artificial intelligence investments led to a sharp fall in AI-sector stocks. Markets were seeking balance but got some breathing room thanks to expectations of major US corporate earnings and falling bond yields.

Focus on the Fed and earnings

Analysts expect the Fed to keep rates unchanged at next week's meeting, while the probability of a 25 basis point hike in December is seen as virtually inevitable. On Wednesday, alongside preliminary PMI data across sectors, Meta and Tesla will release their financial results.

Middle East and oil

Optimism was added by Iranian Foreign Minister Abbas Araghchi, who said on Sunday that Tehran is ready for diplomacy but is also prepared for a new attack; a seven-day plan was proposed to Washington. Against this backdrop, December Brent opened the week down 1.9% — to $107.8 per barrel.

Ukraine and the US

US President Donald Trump said there was significant progress in peace talks between Russia and Ukraine, but criticized Volodymyr Zelensky for strikes on diesel plants in Russia and for failing to end the war.

Dollar, gold and US indices

The yield on 10-year US Treasuries, which rose to 5.09% last week amid a fall in tech stocks, dropped to 5.07% on Monday. The dollar fell 0.1% to 101.7 amid easing geopolitical tensions and expectations that the Fed will keep rates unchanged. Gold rose 0.4% to $4,183 per ounce. On October 16, the S&P 500 lost 1.09%, the Nasdaq Composite 2.15%, and the Dow Jones 0.34%; on Monday, US indices opened higher.

Europe under pressure from protests

European markets traded positively on October 16 (FTSE 100 +0.38%, FTSE MIB 30 +0.93%, CAC 40 +0.28%, DAX 40 +0.95%), but the new weekly start turned negative. Growing weekend protests in France, joined by farmers, analysts believe, could threaten markets and accelerate inflation. On Wednesday, ECB President Christine Lagarde is expected to speak at a discussion in Germany.