Weekly Market Review - 12-10-2026

Oct 12

4 min read

Markets ended the week mixed, with the Dow Jones and FTSE 100 gaining ground while technology shares declined. Meanwhile, closer UK-EU ties, rising US inflation expectations and growing concerns over climate-related financial risks featured among this week's developments.

Market Recap.

Equity markets delivered a mixed performance, with three of the four ETFs finishing higher while technology shares recorded a decline.

The Dow Jones Industrial Average ETF led the gains, rising 0.69%, followed by the FTSE 100 ETF, which increased 0.55%. Both experienced some weakness during the middle of the week before recovering strongly in the final session.

The S&P 500 ETF also advanced, gaining 0.47% after a steadier performance throughout the week. In contrast, the Nasdaq 100 ETF fell 0.52%. Despite making the strongest early gains, it lost ground over the following sessions and finished below its starting level.

News.

Prime Minister Andy Burnham is expected to call for closer economic ties with the European Union, arguing that the UK's current relationship with the bloc is holding back growth.

Speaking to MPs on Monday, Burnham is expected to say that rejecting an improved agreement would be a "dereliction of duty", provided a suitable deal can be negotiated. A UK-EU summit, postponed earlier this year, is now scheduled for November.

The government hopes to improve existing arrangements and explore longer-term cooperation, with potential implications for trade, business investment and economic growth. However, no new agreement has been reached, and the proposals are likely to face political opposition.

Inflation.

US consumers are becoming more concerned about future price increases, according to the Federal Reserve Bank of New York's September Survey of Consumer Expectations, published on 7th October.

Median inflation expectations for the next 12 months rose to 3.90%, from 3.60% in August, their highest level since May 2023. Three-year expectations increased to 3.30%, while five-year expectations remained unchanged at 3.00%. Households also anticipated higher costs for petrol, food and rent, with expected petrol price growth reaching 4.80%. These figures measure what consumers expect prices to do, rather than actual inflation, but provide an indication of the pressures influencing household confidence and spending decisions.

Central Banks.

Minutes from the European Central Bank's September policy meeting, published on 8th October, revealed unanimous support for increasing its three key interest rates by 0.25 percentage points. The decision raised the deposit facility rate to 2.50%, as policymakers responded to persistent energy-related price pressures.

The ECB also discussed risks extending beyond inflation, including rising government borrowing costs and the potential impact of a correction in artificial intelligence-related investments. Policymakers warned that weaker AI investment or falling valuations could affect financial conditions across the Eurozone. Despite these concerns, members considered the economy sufficiently resilient to absorb higher interest rates and maintained their commitment to making decisions meeting by meeting.

Commodities.

Oil prices remained volatile amid developments in the Middle East and a newly announced US-Russia diesel supply agreement. Compared with last week's quoted figures, US WTI crude rose 1.09% to $91.10 per barrel, while Brent increased 3.26% to $104.90. Both benchmarks were lower during the trading session covered by the latest report, although disruption to regional shipping continued to create uncertainty around energy supplies.

Precious metals were mixed compared with last week's quoted figures. Gold increased 0.43% to $4,176.20 per ounce, while silver declined 1.40% to $60.54. Both prices were also lower during the early trading session, although these intraday movements are separate from the comparisons with last week's figures.

ESG.

Aviva has warned that homes being built in flood-prone areas could become uninsurable as climate-related risks increase. Chief executive Amanda Blanc highlighted projections that 115,000 new homes could be built in flood zones over the next decade, while approximately 6.3 million properties in England are already exposed to flooding.

The warning comes as Natural Resources Wales urges communities to prepare for a potentially wetter and windier autumn. Around one in seven properties in Wales is considered at risk of flooding, with the number expected to rise over time.

The developments highlight the growing financial implications of physical climate risks for insurers, property markets and mortgage lenders.

Geopolitics.

Fresh uncertainty surrounds efforts to reduce attacks on energy infrastructure in the Russia-Ukraine conflict after US President Donald Trump announced what he described as an energy ceasefire between the two countries.

Ukrainian President Volodymyr Zelenskyy disputed the suggestion that an agreement was in place, saying Russia had continued attacking Ukrainian energy facilities and had not confirmed its participation. He indicated Ukraine would observe a ceasefire if Russia reciprocated. Meanwhile, a separate US-Russia agreement concerning diesel supplies has attracted criticism over its potential implications for sanctions and Russian revenues. The developments highlight the continuing importance of energy infrastructure, fuel supplies and sanctions policy to the conflict's economic consequences.

Week Ahead.

United States

Inflation data will dominate the US calendar. September's Consumer Price Index is due on Wednesday 14th October, followed by the Producer Price Index on Thursday 15th. Import and export price figures for September are scheduled for Friday 16th. Together, these releases will provide further insight into consumer and business price pressures ahead of the Federal Reserve's next policy decision.

United Kingdom The main focus will be August's monthly GDP figures, due on Thursday 15th October. The release will provide an update on economic growth alongside figures covering services activity and revisions to earlier estimates. July's figures showed monthly growth of 0.40%, making the August release important for assessing whether economic momentum has continued into the second half of the year.

Eurozone

Industrial production figures for August are due on Wednesday 14th October, providing an update on manufacturing activity across the Eurozone. Final September inflation figures follow on Thursday 15th, alongside August's international trade data. The releases will help investors assess industrial demand, external trade conditions and the extent of price pressures across the currency bloc.

It is important to note that the geopolitical situation remains highly fluid, and developments are changing rapidly. As such, the outlook may shift quickly as new information emerges.