Global Markets This Week: How International Stocks Are Performing

As of September 15, 2026, developed markets outside the United States are broadly underperforming their US counterparts, as rising oil prices, elevated bond yields, and uncertainty ahead of major central bank meetings weigh on investor sentiment. Asian equities have struggled in particular, while European markets have also retreated, creating a divergence in which international stocks are trending lower even as the US market has shown more resilience this year. The culprits span geopolitical tension in the Middle East, concerns over artificial intelligence development, and shifting expectations about monetary policy on both sides of the Atlantic and Pacific.

Asian Markets Under Pressure

Asian shares struggled on Tuesday with Middle East tensions and calls by industry figures for a slowdown in AI development weighing on sentiment, according to reporting from Reuters. The concern is multifaceted: geopolitical risk has raised the cost of capital for risk-on trades, while Yemen's Iran-aligned actions triggered concerns over Saudi oil supply disruptions. Most Asian stock markets struggled again Tuesday as oil prices extended gains and investors bet on a Federal Reserve interest rate hike this week, though technology firms saw a slight recovery. The region faces a dual headwind: elevated energy costs directly hurt importing economies, and the prospect of higher US rates tends to attract capital away from emerging markets toward the dollar.

A critical pressure point in Asia is currency. Markets imply about a 76% chance that the Bank of Japan will raise its policy rate by 25 basis points to 1.25% at Friday's meeting, as the BOJ seeks to support the yen following intervention that helped pull the currency away from a 40-year low. A yen that weakens sharply can boost Japan's exporters, but it also signals capital flight and can spook regional investors who worry about contagion.

Europe and Global Equities

In Europe, the STOXX 600 fell 0.49% as gains in oil and gas stocks were offset by losses in tech, which were swept lower after concerns expressed in a letter by Anthropic CEO Dario Amodei, echoed by Elon Musk and Sam Altman, CEO of OpenAI. This reflects a broader pattern: while energy stocks have benefited from the 9% gain in oil prices over the past week, the tech sector, which has driven much of the developed-world rally in 2026, has retreated on fears that the AI expansion may accelerate risks that need governance.

Globally, MSCI's gauge of stocks across the globe fell 0.65%, a broader retreat than the US indices posted. On Wall Street, technology and industrial stocks led declines across the three major indexes, with the Dow Jones Industrial Average falling 0.29%, the S&P 500 falling 0.48% and the Nasdaq Composite falling 0.56%. While the US indices have held up better, this gap reflects the fact that the US market is less exposed to energy shocks, benefits from currency strength, and has lower valuations in some defensive sectors relative to offshore peers.

The Oil and Yield Backdrop

Two forces are reshaping relative performance: energy and rates. Brent futures settled up 1% at $105.68 a barrel, having gained almost 9% last week, with prices for diesel, gasoline and jet fuel all far higher than before the Iran war. More critically, Saudi Arabia's East-West Pipeline was temporarily shut following a drone attack, threatening up to 4% of global oil supply. This is not a small detail for emerging markets with large import bills or developed exporters of energy-intensive goods.

Benchmark 10-year US Treasury yields touched 5% for the first time since 2023, while Germany's 10-year bond yield climbed above 3.51%, its highest level since 2009. Higher yields raise the discount rate used to value future corporate earnings, which pressures equities, and also make bonds more attractive relative to stocks, pulling capital from equity markets. Traders now attach a 90% probability of the Federal Reserve raising rates on Wednesday in what could be its first hike since mid-2023. This is a sea change: after more than three years of low rates and central bank support, the winds are reversing.

What to Watch

Pay close attention to the Fed's rate decision this week and the BOJ's Friday announcement, as these will set the tone for capital flows between the US and Asia for months to come. Monitor oil prices closely: another hit to Saudi supply or escalation in the Middle East could push energy costs higher, which would disproportionately hurt growth-dependent emerging markets and energy importers in Europe. Watch earnings from multinational tech and industrial firms for guidance on whether higher costs and rates will pressure margins. Finally, track the yen and other currency moves; if the yen weakens sharply despite BOJ tightening, it may signal that capital is rotating aggressively toward the dollar, a shift that historically has favored US equities at the expense of international peers.

Disclaimer: This content is for educational and informational purposes only and does not constitute financial, investment, or tax advice. The information presented reflects the author's opinions and analysis at the time of writing and may not be suitable for your individual circumstances. Always consult with a qualified financial advisor before making investment decisions. Past performance is not indicative of future results. MinMaxDoc and its authors are not registered investment advisors.