Key global triggers that could move markets this week

The AI-driven market rally has turned highly volatile as investors grow concerned about lofty valuations, profitability and rising competition. Chipmakers and AI-linked companies have experienced sharp swings, while South Korea's KOSPI recently rebounded 18% after falling nearly 40% over the previous six weeks. Investors will also closely track SpaceX's earnings after the company's market value dropped by nearly $1 trillion since its June IPO. (Source: Reuters)

Escalating conflict in the Middle East remains a major source of uncertainty for financial markets. Oil prices have climbed back toward $90 a barrel as attacks on shipping routes raise concerns over global energy supplies. Saudi Arabia's direct military involvement alongside U.S. forces and continued diplomatic efforts to secure key maritime routes will remain in focus for investors.

Markets will closely watch the July U.S. non-farm payrolls report for fresh clues on the health of the economy. Economists surveyed by Reuters expect payrolls to rise by 91,000 while the unemployment rate is projected to remain at 4.3%. A stronger-than-expected report could reinforce expectations that the Federal Reserve may resume raising interest rates in September to curb inflation.

Record-breaking heatwaves and rapidly spreading wildfires across Europe are creating fresh economic challenges. Rising healthcare costs, insurance claims, reconstruction spending and the risk of higher food prices are adding pressure on already strained government finances. Investors are also monitoring the growing possibility of a strong El Niño event, which could worsen extreme weather globally.

The Reserve Bank of India is expected to keep the benchmark repo rate unchanged at 5.25% when it announces its policy decision this week. While measures introduced in June attracted more than $20 billion in capital inflows, higher oil prices and a weaker rupee continue to cloud the outlook. With inflation moving above the RBI's target, policymakers are expected to balance price stability with the need to support economic growth.