Weekly Market Recap: Global Tensions and Sector Rotations Shape Markets

The week was marked by significant geopolitical developments that created volatility in global markets. The U.S. announced plans to guide ships through the Strait of Hormuz amid rising tensions in the Middle East, leading to concerns over energy supply disruptions. This news contributed to a negative sentiment in European markets, where investors reacted cautiously to potential tariff threats from former U.S. President Trump affecting the automotive sector. In Asia, manufacturing indicators showed strains due to these geopolitical tensions, with supply-chain disruptions becoming more evident. Sector rotations were evident as the technology sector saw a boost, particularly with shares of [[00593:SK Hynix]] (+12.0%) rallying on positive signals regarding increased spending by U.S. tech firms on AI data centers. Meanwhile, the construction sector remained robust, highlighted by $SKA securing a EUR 100M contract for a data center expansion in Finland and a USD 363M contract for the Hudson Tunnel Project in New York, indicating strong demand in infrastructure development. Conversely, energy markets faced challenges as India increased coal consumption due to extreme heat and supply constraints from the Iran conflict. This has raised concerns about sustainability and long-term energy strategies in the region. Amidst these developments, the macroeconomic backdrop continues to show mixed signals. The manufacturing sector's struggles highlight ongoing cost pressures and supply chain issues. The upcoming economic data releases will be crucial for gauging the overall health of the economy and investor sentiment moving forward.