Weekly Market Review | September 7–11, 2026

United States – inflation returns to center stage: Wall Street enters a holiday-shortened trading week, with U.S. markets closed Monday for Labor Day and trading resuming Tuesday. Markets remain close to record highs, but Friday’s powerful employment report changed the interest-rate picture. The U.S. economy added 162,000 jobs in August versus expectations of roughly 56,000, while unemployment remained unchanged at 4.1%. The report brought the possibility of another Federal Reserve rate hike at the September 15–16 meeting firmly back into focus.

Stocks reacted negatively on Friday, with the Dow falling 0.51%, the S&P 500 losing 0.38% and the Nasdaq declining 0.29%. Treasury yields and the U.S. dollar moved higher. Despite Friday’s decline, the S&P 500 posted a small weekly gain and remains only around 1% below its record high.

Inflation is the main event: Following the strong employment report, attention now shifts almost entirely toward inflation. The Producer Price Index will be released Thursday, followed by the much more important Consumer Price Index on Friday. Headline CPI is expected to rise around 0.4% in August, while core CPI is expected to increase about 0.2%. Annual headline inflation is expected near 3.4%, with core inflation around 2.4%. These numbers could ultimately determine whether the Fed raises rates later this month.

A softer-than-expected CPI report could significantly reduce expectations for a September rate hike, push Treasury yields lower and support technology and growth stocks. An inflation report close to expectations would probably keep the Fed decision finely balanced. A hotter reading, however, could make another rate hike increasingly likely and put renewed pressure on equity valuations.

Bond yields remain a major risk: The U.S. 10-year Treasury yield moved back toward the 4.8% area last week. The rise in yields is part of a broader global trend driven by government deficits, persistent inflation concerns and heavy borrowing requirements. As long-term yields remain elevated, they continue to represent one of the main challenges for equities, particularly expensive growth stocks.

Oil and inflation: Energy prices remain another major complication for central banks. Continued tensions between the United States and Iran and disruptions around Gulf oil flows have maintained a significant geopolitical premium in crude prices. OPEC+ decided on Sunday to keep its October production policy unchanged. As long as oil prices remain elevated, the Fed and other central banks will find it more difficult to declare victory over inflation.

Europe: Europe also faces an important week, with the European Central Bank announcing its rate decision Thursday. Markets broadly expect another 25-basis-point increase as higher energy prices have pushed inflation pressures higher again.

Israel: The Israeli market enters the week following another important Bank of Israel decision. The central bank cut its policy rate by 25 basis points to 3.25% last week. Israeli inflation stands at only 1.5% over the past 12 months, below the midpoint of the target range, while the shekel has continued to strengthen. Lower interest rates, subdued inflation and a strong currency remain supportive factors for the domestic market, although geopolitical developments remain an important risk.

Gold and crypto: Gold and Bitcoin will both be highly sensitive to this week’s inflation data because of their relationship with real yields, the dollar and monetary-policy expectations. Gold came under pressure Friday after the strong jobs report pushed yields and rate-hike expectations higher. A softer CPI reading could reverse part of that move and provide renewed support to both gold and Bitcoin, while hotter inflation and another rise in yields could create short-term pressure.

Bottom line: Markets already received confirmation that the U.S. economy and labor market remain strong. The next question is whether inflation is cooling enough to allow the Federal Reserve to remain on hold. Thursday’s PPI and especially Friday’s CPI could therefore become the decisive events of the week. Softer inflation could push yields lower and reopen the door to another equity rally. A hotter report could make a September rate hike the market’s base case and trigger renewed volatility across stocks, bonds and other risk assets.