Stocks Primed to Extend Rally, Yen Edges Lower: Markets Wrap
(Bloomberg) — Stocks extended their rally into a fifth session while currencies steadied after a volatile Monday, as markets regained some stability following speculation over possible yen intervention.
The MSCI All Country World Index — one of the broadest measures of global equities — rose 0.1% and was just short of a record. Asian shares climbed 0.8% to an all-time high. Equity-index futures indicated the rally would extend into US and European stocks after Wall Street benchmarks advanced on Monday.
The yen weakened 0.2% after speculation the US may coordinate currency intervention with Japan had spurred two days of gains against the dollar. The Bloomberg Dollar Spot Index was steady, hovering around lows last seen in 2022, while gold and silver traded near their record highs.
Recent trading had been marked by cross-asset volatility, driven by turmoil in Japan’s bond market and speculation over possible yen intervention. Attention now shifts to the Federal Reserve’s policy decision due Wednesday and megacap technology earnings that will test the durability of the AI-driven rally.
“Economically, things set up nicely,” Goldman Sachs Group Inc. Chief Executive Officer David Solomon said about the backdrop for global markets, citing factors such as a stimulative fiscal policy, a regulatory trend and tone that’s supportive, and massive AI investment.
“At the moment, generally things look relatively green, but that doesn’t mean there aren’t issues that could pop up,” he said in Hong Kong in an interview with Bloomberg TV’s Stephen Engle.
Despite the heightened moves in currencies and metals, stock traders seemed unflustered by the potential for volatility. Wall Street gauges rose Monday after posting the first two-week losses since June.
Enthusiasm over the most-eventful earnings week of the season has investors increasing exposure to tech shares ahead of results from four of the “Magnificent Seven” megacaps, according to Jose Torres at Interactive Brokers.
Tech shares were among the biggest gainers in Asia as well, with companies such as SK Hynix Inc. and Samsung Electronics Co. among those advancing. A gauge of Asian technology stocks jumped 2.3% to an all-time high.
South Korea’s Kospi index — one of the world’s best-performing benchmarks this year and a bellwether for AI stocks — rose 2.7% after opening lower following President Donald Trump’s threat to raise tariffs on the country. The Korean won weakened after surging on Monday.
Trump ratcheted up trade tensions with South Korea following his threat to raise duties on Canadian products to 100% if Ottawa signed a trade deal with China. The president attributed a 25% tariff hike on South Korean goods to the country’s legislature failing to codify a trade agreement reached with the US last year.
“We don’t think the threat has a big impact,” Luca Paolini, chief strategist at Pictet Asset Management, said in a Bloomberg TV interview, referring to the potential tariffs on South Korea. “We’ve learned from the past that Trump threatens, but backs down. This seems also to be more of a tactical nature.”
Earlier this month, Trump had threatened to slap tariffs on some European countries’ goods over his quest to seize control of Greenland. He then backed off.
In other trade news, India and the European Union agreed on a free trade agreement capping nearly two decades of negotiations at a time of strained ties with Washington.
What Bloomberg strategists say…
Asian equities will likely extend their recent outperformance because they benefit from their exposure to US and Chinese AI booms, while being less vulnerable than US peers to the potential for fresh Trump decrees on tariffs or affordability measures. Tuesday’s impressive dip-buying in the Kospi stands as a template for risk assets.
—Garfield Reynolds, MLIV Asia Team Leader. Click here for the full analysis.
Meanwhile, the yen remained in focus after comments from Japanese officials fueled speculation that the government may intervene in the market to prevent the currency from resuming its slide. To some, however, the recent rally has partly neutralized the likelihood of intervention.
“The dramatic recovery in the yen suggests that actual intervention is not needed,” said Marc Chandler at Bannockburn Capital Markets.
Elsewhere, Treasuries remained in a narrow range with Fed officials expected to hold rates steady following three straight cuts at the end of 2025, as a steadier jobs market restores a degree of consensus at the central bank after months of growing division.
Expectations about Fed policy have been shifting in response to changes in the consensus view on whom Trump will nominate to succeed Chair Jerome Powell, whose term expires in May.
“Even though the Fed isn’t expected to cut interest rates, Powell’s press conference may be as much about Fed independence as it is policy,” said Chris Larkin at E*Trade from Morgan Stanley.
Corporate Highlights:
China’s Anta Sports Products Ltd. has agreed to buy a stake of about 29% in Puma SE for €1.5 billion ($1.8 billion), becoming the biggest shareholder in the German company. Micron Technology Inc. will inject an additional $24 billion in Singapore over the next decade to expand its manufacturing capabilities amid an AI-induced memory chip shortage. FAT Brands Inc., the owner of restaurant chains Fatburger, Johnny Rockets and Twin Peaks, filed for bankruptcy. European car sales grew for a third year in a row in 2025 as consumers snapped up more affordable electric and hybrid models. SK Hynix shares jumped to an all-time high after local media said the company is the sole supplier of advanced memory for Microsoft Corp.’s new artificial intelligence chip. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.3% as of 6:54 a.m. London time Nasdaq 100 futures rose 0.6% The MSCI Asia Pacific Index rose 0.8% Hong Kong’s Hang Seng rose 1.3% The Shanghai Composite was little changed Euro Stoxx 50 futures rose 0.4% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1874 The Japanese yen fell 0.2% to 154.51 per dollar The offshore yuan was little changed at 6.9550 per dollar The British pound was little changed at $1.3686 Cryptocurrencies
Bitcoin rose 0.3% to $88,197.26 Ether was little changed at $2,924.01 Bonds
The yield on 10-year Treasuries was little changed at 4.22% Japan’s 10-year yield advanced five basis points to 2.285% Australia’s 10-year yield advanced three basis points to 4.84% Commodities
Spot gold rose 1.6% to $5,089.33 an ounce West Texas Intermediate crude fell 0.2% to $60.51 a barrel This story was produced with the assistance of Bloomberg Automation.
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