Stocks Rise, Bonds Fall as US Shutdown Nears End: Markets Wrap

(Bloomberg) — Stocks climbed with US equity-index futures as hopes for a deal to end the longest US government shutdown lifted sentiment after a volatile week in which investors grappled with concerns over lofty AI valuations.

Contracts for the S&P 500 rose 0.7% and those for the Nasdaq 100 advanced 1.2% as Senate Republican leader John Thune said a deal was “coming together” and he planned a test vote on a narrow spending package that would end the 40-day government shutdown. A group of Senate Democrats is leaning toward voting to advance the package, provided final details can be worked out.

Asian shares rose 0.5% with South Korea leading the gains. Bonds fell across the curve, with the yield on 10-year Treasuries rising three basis points to 4.13%. The yen fell 0.4% against the dollar.

Ending the shutdown would give investors greater clarity on key economic data such as jobs and inflation, helping to lift the fog around the Federal Reserve’s path on interest rates. While hopes for a deal may provide some relief, markets remain concerned after last week’s sharp selloff in technology shares reignited concerns about stretched valuations.

“Hopes of a deal are also lifting confidence and prompting investors to rotate back into equities and risk assets, reducing demand for safe-haven bonds,” said Charu Chanana, the chief investment strategist at Saxo Markets in Singapore. “Volatility, however, could remain elevated until a deal is formally passed.”

In other corners of the market, most commodities gained ground, with Brent crude advancing above $64 a barrel, silver spiking almost 2%, and copper advancing 0.8% in London. Gold climbed 0.8% and a gauge of the dollar rose 0.1%.

The record-breaking US government shutdown is nearing an end after a group of moderate Senate Democrats agreed to support a deal to reopen the government and fund some departments and agencies for the next year, people familiar with the talks said.

The chamber is set to hold a procedural test vote on Sunday. If that vote succeeds, the Senate will need the consent of all members to end the shutdown quickly. Any one senator can force days of delay and votes. The House would then need to pass the bill for the government to reopen and Speaker Mike Johnson has said he will give lawmakers two days’ notice to return.

Once the government reopens, investors will regain access to data on the health of the US economy, helping them better gauge the Fed’s path on rate cuts. Last week, traders faced conflicting signals: private data showed companies cutting jobs, while a flurry of comments from Fed officials about inflation left markets questioning whether a December rate reduction will materialize.

“The lack of data had increased uncertainty, especially with regard to further Fed cuts,” said Nick Twidale, chief market analyst at AT Global Markets in Sydney. “But the resumption of data should open the way for more certainty on cuts.”

What Bloomberg strategists say…

Global investors were angsty last week about AI valuations and how much has been priced into stocks. However, Nvidia’s earnings outlook next week is likely to follow its solid track record of reestablishing the positivity for Asia and global tech stocks — as well as Korean equities, in particular.

— Mark Cranfield, MLIV strategist. For full analysis, click here.

Even as a deal neared, investors were still pondering the valuations in the technology sector, with the Nasdaq 100 posting its worst week since early April.

Meanwhile, US investors are increasingly buying Japanese stocks focused on tech and artificial intelligence, lured by the country’s outsized returns compared with US stocks, according to Goldman Sachs Group Inc.

The sudden slump in Asia’s technology shares last week had jolted investors, serving as a stark reminder that the world-beating rally in artificial intelligence and semiconductor stocks may be nearing a short-term crest.

Asia’s tech sector has outpaced its US counterpart this year, fueled by cheaper valuations and the excitement sparked by China’s AI breakthroughs, particularly that of DeepSeek. The MSCI Asia Pacific Index has climbed 24% in 2025 — on track to outperform the S&P 500 by the widest margin in 16 years.

Corporate News:

Pfizer Inc. agreed to buy Metsera Inc. for up to $10 billion, prevailing over Novo Nordisk A/S in a tumultuous bidding war after US regulatory opposition thwarted the Danish drugmaker’s rival bid for the obesity drug startup. Nvidia Corp. Chief Executive Officer Jensen Huang said he had asked Taiwan Semiconductor Manufacturing Co. for more chip supplies as artificial intelligence demand remains strong. Visa Inc. and Mastercard Inc. are close to a new agreement that will attempt to settle a two-decade legal spat with merchants, according to a person with direct knowledge of the matter. Olympus Corp. shares soared the most since November 2019 after the Japanese medical device maker unveiled plans to cut jobs and streamline operations. GoTo Gojek shares rose as much as 9.8% to the highest level since August, after Indonesia’s State Secretary Prasetyo Hadi said the Southeast Asian nation’s sovereign wealth fund, Danantara, is set to be involved in a plan to combine Grab Holdings Ltd. and GoTo Group. Some of the main moves in markets:

Stocks

S&P 500 futures rose 0.7% as of 12:31 p.m. Tokyo time Nikkei 225 futures (OSE) rose 1.1% Japan’s Topix rose 0.4% Australia’s S&P/ASX 200 rose 0.7% Hong Kong’s Hang Seng rose 0.6% The Shanghai Composite was little changed Euro Stoxx 50 futures rose 1.4% Currencies

The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1554 The Japanese yen fell 0.4% to 153.98 per dollar The offshore yuan was little changed at 7.1236 per dollar The Australian dollar rose 0.4% to $0.6516 Cryptocurrencies

Bitcoin rose 1.4% to $105,935.26 Ether rose 1.4% to $3,630.49 Bonds

The yield on 10-year Treasuries advanced four basis points to 4.13% Japan’s 10-year yield advanced one basis point to 1.690% Australia’s 10-year yield advanced five basis points to 4.40% Commodities

West Texas Intermediate crude rose 0.7% to $60.17 a barrel Spot gold rose 1.2% to $4,050.68 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Winnie Hsu, Ruth Carson and Jake Lloyd-Smith.

(An earlier version corrected index levels in the second paragraph.)

©2025 Bloomberg L.P.