Bond yields move higher on inflation concerns

US equities edged higher over the week despite a sharp sell-off in global government bonds. The US 10-year Treasury yield rose above 5.2%, while the 30-year yield reached its highest level since 2004, as stronger business activity, elevated energy prices and hawkish Federal Reserve commentary increased expectations of further rate hikes. US new home sales also rose 6.4% in August, well ahead of expectations

President Trump and President Xi agreed to extend the existing US-China trade truce by two months, avoiding an immediate escalation in tariffs. However, the summit delivered few substantive breakthroughs, with differences over tariffs, rare-earth supplies and technology restrictions remaining unresolved. Over in Europe, business activity expanded at its fastest pace in almost four years, while UK activity slowed as inflationary pressures increased.

Last week's highlights

	S&P Global Manufacturing & Services PMIs (23/09) - US business activity rose in September, with the composite PMI increasing to 58.4 from 56.0. Trump  - Xi Jinping Summit (24/09) – Extended the existing US-China trade truce by two months, although few substantive breakthroughs were announced. New Home Sales (24/09) – Rose 6.4% in August, well ahead of expectations.
	Swiss National Bank Meeting (24/09) – Left its policy rate unchanged at 0%, as expected, noting that higher inflation remains largely driven by energy prices. HCOB Eurozone Composite PMI (23/09) – Increased to 53.1 in September from 52.0 in August, the highest level in more than 3 years.
	S&P Global Composite PMI (23/09) – Dropped to 51.7 in September from 52.5 in August, as UK business activity cooled and inflation pressure rose.
	People’s Bank of China Meeting (21/09) – Left benchmark lending rates unchanged for the 16th consecutive month, as expected. Central bank also indicated greater tolerance for a gradually stronger yuan.

Looking ahead to this week, investors in the US will receive several data points on the labour market, including nonfarm payrolls. The most recent report showed that the US economy added 162,000 jobs in August, strongly ahead of expectations. Eurozone inflation, UK GDP and Chinese manufacturing PMIs will also be released, while the Reserve Bank of Australia is due to meet.

What's on the radar

	Core PCE Price Index (30/09) ADP Nonfarm Employment Change (30/09) Nonfarm Payrolls (02/10)
	Eurozone CPI – September Preliminary (02/10)
	UK Nationwide House Price Index (30/09) S&P Global Manufacturing PMI (01/10)
	Reserve Bank of Australia Meeting (29/09) China Manufacturing PMI (30/09)

Chart of the moment - Global equities’ weight problem

Source: Davy, Bloomberg as of 23/09/2026. Note: The chart shows index weight on the first day of each calendar year. For 2026, the weight shown is as of 23/09/2026.  

• Global equity markets have become increasingly concentrated as mega cap tech names continue to outperform. 
• The top 10 companies are now worth almost $30 trillion and account for roughly 29% of the MSCI World Index.
• The rise of passive investing, enthusiasm around AI and strong earnings growth have all contributed to the increase in concentration.
• This concentration has boosted index returns in recent years but has also increased reliance on a narrow group of market leaders.