S&P 500 Posts Best Day in Six Weeks; Bitcoin Rises: Markets Wrap

(Bloomberg) — Technology stocks propelled an advance in global equities as traders kicked off a data-packed week more optimistic that the Federal Reserve will cut interest rates in December.

The S&P 500 rose 1.5% and the tech-heavy Nasdaq 100 ended Monday’s session more than 2% higher. While the former notched its best day in six weeks, the latter gained the most since May.

Bitcoin reversed an earlier drop. The US 10-year Treasury yield declined to 4.03%. Oil pushed higher as traders weighed the prospect of a Ukraine-Russia peace deal.

Federal Reserve Governor Christopher Waller fueled optimism on Monday after indicating support for a rate cut next month. New York Fed President John Williams had a similar impact on the market on Friday after he said a near-term rate cut remains a possibility. San Francisco Fed President Mary Daly also backs lowering rates in December, she said in an interview on Monday. While the central bank’s December meeting is the next big milestone for markets, investors are relying on dated economic data due to delays caused by the US shutdown.

There’s room for different interpretations on how the economy is doing because of ambiguity in the data given the lag, James Egelhof, chief US economist at BNP Paribas, said on Bloomberg Television Monday.

“It’s a more disorderly process than what we’re accustomed to,” he said. “At the same time, we think that Powell wants to keep cutting. He has the votes to do that. We think the data is giving a little cover to him to deliver one last rate cut to protect the labor market from gradual deterioration.”

Money markets are pricing in a more than 70% chance of a Fed rate cut in December, after the odds fluctuated in recent weeks amid growing fissures among policymakers and the data blackout.

US stocks are gaining on Monday after a volatile week marked by concerns about lofty AI valuations and lack of clarity regarding the Fed’s path ahead. UBS Securities’ trading desk now thinks the selloff in US stocks may have run its course, especially with expectations for the Fed lowering rates next month seemingly back on track.

“I believe the combination of a reset of the equity market and the increased odds of a rate cut in December has propelled stocks higher and put the year end melt-up back on the table,” said Chris Murphy, Susquehanna International Group’s co-head of derivatives strategy.

Even so, Ed Yardeni, founder of Yardeni Research, says the S&P 500 won’t reach his year-end target of 7,000 points until next year because of investors taking profits in AI-related stocks. His target for the index is one of the highest among Wall Street strategists.

What Bloomberg Strategists Say:

“US stocks enter the shortened Thanksgiving week in an oversold state, with recent volatility likely to fade and support a melt-up on broader participation.”

— Michael Ball, Macro Strategist, Markets Live

For the full analysis, click here.

Ahead of Thanksgiving and Black Friday, September retail figures due Tuesday are expected to show a moderation as consumers remain squeezed by high prices.

Other data due this week include the producer price index and durable goods orders for September. Jobless claims on Wednesday, covering the November survey week, will take on added importance as the Fed leans on alternative indicators in the absence of payroll figures.

“There are increasing signs that the economy remains sluggish, which will put additional emphasis on the retail sales release this week, although once more the data will be slightly historic,” said Richard Hunter, head of markets at Interactive Investor.

In geopolitical news, US President Donald Trump and Chinese President Xi Jinping on Monday held their first talks since agreeing to a tariff truce last month, discussing trade, Taiwan and Russia’s invasion of Ukraine.

Some of the main moves in markets:

Stocks

The S&P 500 rose 1.5% as of 4:04 p.m. New York time The Nasdaq 100 rose 2.6% The Dow Jones Industrial Average rose 0.4% The MSCI World Index rose 1.3% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1522 The British pound was little changed at $1.3110 The Japanese yen fell 0.3% to 156.85 per dollar Cryptocurrencies

Bitcoin rose 1.2% to $88,996.43 Ether rose 4.6% to $2,971.56 Bonds

The yield on 10-year Treasuries declined three basis points to 4.03% Germany’s 10-year yield declined one basis point to 2.69% Britain’s 10-year yield was little changed at 4.54% Commodities

West Texas Intermediate crude rose 1.7% to $59.02 a barrel Spot gold rose 1.6% to $4,130.78 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Andre Janse van Vuuren, Lynn Thomasson, Natalia Kniazhevich and Denitsa Tsekova.

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