Global markets started the week on a positive note, buoyed by optimism stemming from diplomatic activity despite hawkish expectations regarding the U.S. Federal Reserve's interest-rate policy. Economic talks between the United States and China, along with expected leader-level contacts ahead of the United Nations Summit, supported risk appetite.
Regional tensions in the Middle East and the conflict between Russia and Ukraine continue to fuel concerns over energy supplies. Rising fuel prices continue to pressure economic growth and inflation expectations.
Diplomacy weighs on oil prices
Rising energy costs in the United States strengthened hawkish expectations regarding the Fed's monetary policy. Market pricing increasingly points to the possibility that the Fed could deliver an additional rate hike by the end of the year, while statements from numerous Fed officials will be closely watched this week.
Numerous leader-level meetings are expected at the UN Summit in the United States, particularly involving the United States and China. Expectations that these contacts could produce positive results and reduce geopolitical risks contributed to oil prices starting the week lower.
The decline in oil prices eased inflation concerns somewhat and increased demand for riskier assets. Analysts assess that easing problems related to oil supplies could make the economic outlook and central banks' policy road maps more predictable.
U.S. and Chinese delegations discuss trade
U.S. and Chinese delegations met in New York to discuss economic and trade issues ahead of Chinese President Xi Jinping's expected visit to the United States. Treasury Secretary Scott Bessent led the U.S. delegation, while Vice Premier He Lifeng headed the Chinese delegation.
Speaking after the meeting, which lasted all day at JPMorgan Chase's headquarters in Manhattan, Bessent said they had held a successful meeting with China on trade and artificial intelligence. Bessent said the sides had agreed to meet again and that the United States had proposed establishing a notification mechanism between the two countries.
U.S. Ambassador to the UN Mike Waltz also said the door remained open for Iran to return to the negotiating table.
Treasury yields and the dollar watched in U.S. markets
The yield on the U.S. 10-year Treasury note started the week broadly flat at around 5%. The dollar index, which rose to 100 last week amid expectations that the Fed could raise interest rates consecutively, also began the new week near that level.
Gold started the week down 0.5% at $4,355 per ounce as high Treasury yields and a strong dollar increased its opportunity cost. The price of November Brent crude fell 2.1% to $101.7 per barrel amid diplomacy expectations.
On Friday, the S&P 500 rose 0.17% and the Nasdaq gained 0.3% on the New York Stock Exchange. The Dow Jones lost 0.18%. U.S. stock-index futures started the week higher.
Positive outlook in European and Asian markets
European markets ended Friday lower. Developments at the UN General Assembly, along with energy prices and Purchasing Managers' Index data from countries in the region, will be monitored in the markets.
Tensions in the Middle East and concerns over oil and gas supplies are prompting investors in Europe to act cautiously. A renewed escalation of the conflict between Russia and Ukraine is also keeping geopolitical risks elevated.
Russia's Defense Ministry announced that it had struck a logistics center, a depot and vessels used for military purposes in Ukraine. Ukrainian President Volodymyr Zelenskyy said he had discussed efforts to end the war with U.S. President Donald Trump and that they had also discussed a meeting planned to take place in New York in the coming days.
Zelenskyy said they had agreed to meet Trump in New York and that a diplomatic process was underway. As rising energy costs in Europe continued to pressure economies, 10-year government bond yields rose in Germany, the United Kingdom and France.
On Friday, the FTSE 100 fell 1.45% in the United Kingdom, the FTSE MIB 30 declined 1.60% in Italy, the CAC 40 dropped 1.49% in France and the DAX 40 lost 1.60% in Germany. European stock-index futures, however, started the week higher.
Positive signals from talks between the United States and China boosted risk appetite in Asian markets. Expectations that the meeting expected this week between U.S. President Donald Trump and Chinese President Xi Jinping could produce a positive outcome came to the fore.
Xi Jinping is expected to visit the United States on September 23. During Trump's second term, U.S. tariff increases and technology restrictions, along with China's control over rare-earth elements, have been among the main issues in the disputes between the two countries.
After Trump and Xi Jinping met in Busan, South Korea, on October 30, 2025, the sides issued positive messages about a temporary compromise on disputed issues. The decline in oil prices also supported risk appetite in Asian markets.
Near the close, South Korea's Kospi index rose 1.3%, China's Shanghai Composite gained 0.5% and Hong Kong's Hang Seng index increased 0.5%. Markets in Japan remained closed for a holiday.
Focus on Turkish markets
The BIST 100 index on Borsa Istanbul ended Friday down 1.67% at 13,284.42 points. The October contract based on the BIST 30 index on Borsa Istanbul's Futures and Options Market fell 0.14% in the evening session compared with the regular-session close.
President Recep Tayyip Erdoğan arrived in New York, United States, to attend the 81st UN General Assembly and hold various meetings.
The Capital Markets Board extended the liquidation period for funds slated for liquidation from three months to six months, taking into account their portfolio structures and market developments. On September 17, the board had authorized Türkiye İş Bankası and Ziraat Bank to manage the liquidation processes for 131 investment funds held by seven portfolio management companies.
Dollar/Turkish lira closed Friday at 48.7650. The exchange rate reached 48.8010 at the opening of the interbank market, up 0.1% from the previous close.
Domestic data on capacity utilization, the real-sector confidence index and the August Producer Price Index for goods produced abroad will be monitored. In the BIST 100 index, 13,100 and 13,000 points are being watched as support levels, while 13,400 and 13,500 points are seen as resistance levels.
