America
Global markets remain in shock: Nikkei, Dow Jones, Kospi at lows
Japan’s Nikkei 225 stock index started the week down 12.4%, continuing the sell-off that has rocked global markets as investors fretted over the state of the US economy.
The Nikkei closed down 4,451.28 points at 31,458.42. The broader TOPIX index fell 12.8% as selling intensified in the afternoon.
Earlier on Monday, the S&P 500 Index fell 2.4% and the Dow Jones Industrial Average fell 2.6%, turning the trading outlook on Wall Street negative.
The report, which showed that hiring by US employers slowed much more than expected last month, according to AP, shook financial markets and destroyed the euphoria that had lifted the Nikkei to an all-time high above 42,000 in recent weeks.
The Nikkei 225 fell 5.8 per cent on Friday, its worst two-day drop ever. Its worst one-day drop was on 20 October 1987, the so-called “Black Monday”, when it fell 3,836 points, or 14.9%. That Monday was grim enough, with the benchmark falling as much as 13.4% at one point.
Tokyo stocks have been falling since the Bank of Japan (BoJ) raised its key interest rate on Wednesday. The Nikkei is currently down 3.8% year-on-year.
One of the factors that prompted the BoJ to raise rates was the ongoing weakness of the Japanese yen, which has pushed inflation above the central bank’s 2% target. Early on Monday, the dollar fell to 142.59 yen from 146.45 at the end of Friday, well below levels of over 160 yen a few weeks ago. The euro also fell from $1.0923 to $1.0914.
Stocks hit highs earlier this year on the back of developments in artificial intelligence.
The recent sell-off has also hit markets dominated by computer chip makers such as Samsung Electronics and other technology stocks: South Korea’s Kospi fell more than 9 per cent on Monday as Samsung’s shares fell 11.6 per cent. The Kospi closed down 8.8 per cent at 2,441.55.Taiwan’s Taiex also lost 8.4 per cent as the world’s biggest chipmaker Taiwan Semiconductor Manufacturing Co. fell 9.8 per cent.
Hong Kong’s Hang Seng index lost 2.2% to 16,579.97 and Australia’s S&P/ASX 200 index fell 3.7% to 7,649.60.
Double whammy on Borsa Istanbul
The Shanghai Composite Index, which has been somewhat isolated from other world markets by capital controls, initially rose but then fell 1.5 per cent to 2,862.56.
The S&P 500’s 1.8 per cent drop on Friday was the first consecutive loss of at least 1 per cent since April. The Dow Jones Industrial Average fell 1.5 per cent and the Nasdaq Composite Index fell 2.4 per cent, 10 per cent below the record it set last month. Investors call a decline at these levels a “correction”.
On the Borsa Istanbul, the circuit breaker system connected to the index was activated at 09:55:22 following a 6.72 per cent drop in the morning. Then, as the decline in the index deepened, the circuit breaker was activated for the second time. The BIST 100 index fell below the critical 10,000 points.
Stocks fell sharply on Friday after weaker-than-expected US payrolls data fueled fears that high interest rates to curb inflation could drag the US economy into recession.
The VIX, an index that measures how worried investors are about an impending drop in the S&P 500, jumped nearly 26% early on Monday. Eventually, the VIX rose to 34. The VIX, which is considered Wall Street’s “fear indicator”, last reached this level in June 2020. Bitcoin, which recently soared to nearly $70,000, fell 14 per cent to $54,155.
Oil prices also fell, with US benchmark crude down 74 cents to $72.78 a barrel. Brent crude, the international standard, lost 67 cents to $76.14 a barrel.
Artificial intelligence stocks plunge
Artificial intelligence stocks fell as much as 9.6%, with Apple down 6.1%. Microsoft, Meta and Tesla also lost more than 5%.
While the largest US companies fell on Tradegate in Germany, Nvidia led the “Magnificent Seven” group in the decline of US stock index futures.
Nvidia fell as much as 17% on Tradegate, while Apple fell 10%, Microsoft 9%, Alphabet 9.6%, Amazon 9.3%, Meta 10% and Tesla 10%.
According to Bloomberg, these moves are a sign that “the air is coming out of the equity markets, driven by big gains in a small number of stocks”.
It notes that if confidence in the AI trade continues to fall on weak earnings and the US economy really takes a hit, there could be more losses to come.
However, it points out that a “window of opportunity” could open for investors, especially if central banks take action to cut interest rates, which could support sectors that benefit from low borrowing costs.
Goldman Sachs: A healthy correction
In a report, IG’s Yeap Jun Rong said investors will be watching data on the US services sector from the Institute for Supply Management on Monday, which could help determine whether the global sell-off was an overreaction.
The global rout began just days after US stock indexes had their best day in months after Federal Reserve Chairman Jerome Powell gave the clearest sign yet that inflation is slowing enough to start cutting interest rates in September.
Now there are growing concerns that the Fed may have increased the risk of recession in the world’s largest economy by keeping its key interest rate at a two-decade high for too long.
On the other hand, Christian Mueller-Glissmann of Goldman Sachs told Bloomberg that the market situation shows a “somewhat healthy correction”. He also argued that while the weakness in US data was a surprise, Goldman Sachs economists were “not that worried”.
Bets on an immediate rate cut: Will the Fed cut in a week?
The market turmoil is fuelling bets on an immediate policy response from the Fed.
Investors are currently pricing in a 60% chance of a 25bp cut within a week.
Given that the central bank announced its last decision just a few days ago, this is seen as a real sign of concern.
America
Musk appointed co-director of Pentagon future warfare initiative
The world’s richest man, Elon Musk, has assumed the co-directorship of a Pentagon initiative focused on the future of warfare, known as “Project Meridian”.
Musk’s new role was announced by US Secretary of Defence Pete Hegseth.
Musk, who has long expressed his conviction that wars will ultimately be fought with autonomous unmanned aerial vehicles, will advise the project as co-director alongside Palmer Luckey, founder of defence start-up Anduril, and former Speaker of the House of Representatives Newt Gingrich.
In a memorandum issued at the Pentagon, Hegseth stated that the group would “examine the battlefields of the future” and “determine which weapons and technologies warfighters must employ to achieve dominance in these environments.”
During his “State of the Force” address at Marine Corps Base Quantico, Hegseth said:
“The best predictors of future conflict do not reside exclusively within the Pentagon. Obvious biases and risks arise when we task ourselves with both framing the questions and answering them.”
Hegseth stated that this initiative would commence immediately and that, following his address, he would convene with Musk, Luckey, and Gingrich at a secure location.
Project Meridian will have 120 days to “ruthlessly map the trajectory of wars, domains, and technologies”, a process that will culminate in the public disclosure of its findings alongside a classified annex.
Hegseth outlined an expansive mandate extending “from beneath the surface of the Earth to beyond the Moon.”
Rather than formulating new military strategies or policies, the panel will seek to identify “the domains we must seize and the capabilities we must master”, focusing on the effort to “discover, develop, and field” the weapons and systems that next-generation American troops may require.
The group is expected to submit a report containing recommendations to him by the end of January.
In 2024, Musk remarked: “Future wars will be entirely about drones and hypersonic missiles.” This was merely one of several similar statements he has made in recent years.
For Musk, whose oversight role at the Department of Government Efficiency (DOGE) ended in turmoil and escalated into a dispute with President Donald Trump over Trump’s spending bill, this appointment marks his formal return to government in an official capacity.
Musk and Trump ultimately reconciled, and Musk attended a meeting on artificial intelligence safety at the White House this week alongside other technology leaders.
Meridian forms part of a broader push announced by Hegseth to restructure the military around autonomous warfare and rapidly advancing technologies.
Hegseth announced the establishment of the Autonomous Warfare Command (AUTOWARCOM), a new four-star combatant command endowed with what he termed “service-like authorities” to scale autonomous and robotic capabilities across the joint force.
The Department of War will also begin phasing in new occupational frameworks across all military branches to establish specialised career tracks for what Hegseth described as “the next generation of autonomous warfighters.”
“We should have conceived an Autonomous Warfare Command a decade ago,” Hegseth said, explaining that Meridian aims to gaze far enough ahead to enable the military to anticipate the next technological shift rather than lag behind.
America
Pentagon breach exposes personal records of three million people
A cyberattack targeting the US Department of War’s personnel database has resulted in the leak of personal information belonging to approximately 3 million people.
Speaking to ABC News, a Pentagon official stated that the system accessed by unauthorised individuals contained the records of 2,760,000 living persons and 294,000 deceased individuals.
The Military Times portal, which first broke the news, had reported the number of affected individuals as approximately 4 million based on two sources. The Pentagon official subsequently conveyed different figures to ABC News.
The leak encompasses Social Security numbers and duty information belonging to military personnel and civilian employees. According to an official notification examined by Military Times, the compromised records may also include names, dates of birth, contact information, sex, race, and military occupational specialties.
The unauthorised access to the information system of the Defense Manpower Data Center (DMDC) lasted for approximately nine months, between October 2025 and 16 July 2026.
ABC News reported that the access in question was obtained by a small number of third-party users. The vulnerability was closed after it was identified.
The DMDC is considered one of the Pentagon’s primary personnel records centres. More than 60 million records belonging to active-duty personnel, reservists, civilian staff, contractors, retirees, veterans, and military family members are stored at the centre.
The Pentagon has not detected any evidence that the leaked data has been misused. Military Times reported that affected individuals were offered identity restoration and credit history monitoring services.
A similar data breach previously occurred on the Federal Bureau of Investigation’s (FBI) recruitment website, FBIJobs.gov. According to information obtained by ABC News from internal communications and sources, the FBI is considering the possibility that data belonging to its entire staff may have been stolen.
The New York Times (NYT) examined a portion of the stolen FBI records. Home addresses, telephone numbers, official email addresses, Social Security numbers, dates of birth, hiring dates, and emergency contact details for relatives were identified within these documents.
The database also contained unit designations, duty roles, and information regarding the supervisors of personnel. Some records revealed assignments within counterintelligence and counternarcotics units, as well as departments examining threats originating from Russia, China, and Iran.
Ciaran Martin, the former head of the UK National Cyber Security Centre, noted that this type of breach could directly affect the FBI’s operational capabilities.
The hacker group known as ShinyHunters had announced that it had seized medical data and security clearance records alongside files belonging to tens of thousands of active and former FBI employees.
Experts evaluating the matter for the NYT warned that this information could be used to track agents, threaten their families, or compile dossiers by foreign intelligence services.
The ShinyHunters group initially threatened to release the data unless the bureau withdrew an advisory it had published concerning the group’s attack methods.
The group later asserted that it had never intended to leak the information and characterised its action as an advertising campaign.
In a report published in May, Reuters noted that the personal data of US military personnel had been used in surveillance and attack preparations.
According to the agency, Washington’s adversaries gained the ability to pinpoint areas where troops were concentrated by exploiting commercially available location data. US lawmakers at the time criticised the Pentagon for failing to adequately protect the personal data of military personnel.
America
Canada diversifies oil and gas exports away from US
US President Donald Trump’s trade policy and the Washington administration’s push to increase Venezuelan oil imports are prompting Canada to diversify its energy exports.
According to a report by The Wall Street Journal, recent developments are accelerating Canada’s development of new oil and natural gas projects.
Steps taken by the Ottawa administration, which aspires to become an energy superpower, are seen as potentially strengthening the country’s position in global markets.
In Canada, the world’s fourth-largest oil producer and fifth-largest natural gas producer, the energy sector accounts for approximately one-fifth of total exports.
Almost all of the country’s natural gas exports and approximately 90% of its oil exports go to the US.
The newspaper writes that the trade war with Washington and the atmosphere of confrontation entered into with Iran have heightened Canada’s desire to turn to alternative markets outside the US.
Officials plan to increase shipments of oil and liquefied natural gas (LNG) to European and Asian markets.
Accelerating infrastructure investments in line with this target, Canada is also shortening approval processes. The government is prioritising the construction of an oil pipeline extending specifically to the west coast.
According to the newspaper’s estimate, if major pipeline projects are implemented, Canada’s daily oil transport capacity could rise to 6.8 million barrels by 2034.
Routes heading to the west coast will make up approximately 30% of this capacity.
The Canadian administration is simultaneously advancing LNG export projects. According to the report, these investments could allow approximately 55% of Canadian natural gas exports to be directed to markets outside the US by the early or mid-2030s.
While the government expands tax incentives for the oil and natural gas sector, the province of Alberta also plans to overhaul its royalty system.
However, the newspaper notes that implementing the new projects requires heavy investment, and the process depends on the final decisions taken by producers as well as the completion of regulatory approval processes.
The expansion of pipeline and LNG infrastructure could gradually reduce Canada’s dependence on the US market while raising its share in the global energy market.
The Canadian Prime Minister’s demand to reduce reliance on the US market had also come to the fore in July.
According to Carney’s statement, the province of Alberta submitted a plan for a pipeline spanning more than 1,000 kilometres to the west coast of British Columbia.
Targeted for completion by September 2027, the line will reach the Pacific coast by following an existing corridor through the mountainous terrain.
This shift in energy comes at a time of strained relations with the US. Donald Trump said that if Canada obtains associate member status in the European Union, he could halt trade with Europe in certain sectors and impose high tariffs.
As reported by the Associated Press, Trump characterised such a rapprochement as a “potentially hostile act”.
European Commission President Ursula von der Leyen had proposed opening the path for Canada to become the EU’s first associate member. The terms of this associate membership status, which is not defined in EU treaties, are not yet clear and require the approval of member states to enter into force.
Canada, which does not seek full membership, aims for maximum rapprochement with the EU.
Following Trump’s return to the White House, relations between Washington and Ottawa deteriorated. The Trump administration, which repeatedly called on Canada to become the “51st state” of the US, introduced additional tariffs.
In July, the US began imposing 50% tariffs on certain Canadian-origin goods.
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