Stock Rally Loses Steam as Dollar Extends Advance: Markets Wrap
(Bloomberg) — The dollar advanced against all major peers and a global stock rally wavered as investors weighed trade tensions and the impact of upcoming US inflation data.
Futures on the S&P 500 and Nasdaq 100 erased early gains, suggesting Monday’s Wall Street rally of more than 1% is set to to fizzle. A gauge of the dollar rose for a third day as the greenback advanced against all Group-of-10 peers.
Japanese stocks were volatile and the yen dropped 0.5% after Sanae Takaichi won a parliamentary vote to become prime minister, opening the way for more fiscal spending.
The S&P 500 has logged its biggest two-day gain since June as the third-quarter earnings season gets into full swing, with about 85% of US firms beating profit estimates so far. Netflix Inc., General Electric Co., The Coca-Cola Co. and General Motors Co. are among companies scheduled to report on Tuesday.
While the US government shutdown and trade tensions continued to drive investor emotion and volatility, drawdowns have been short-lived, as investors see them as opportunities to add risk to their portfolios. Global stocks have rallied to new highs since their April slump as traders bet the billions spent by companies on artificial intelligence will yield profits in the future.
“Another day, another dearth of US data, as the government shutdown continues, with no end in sight,” said Michael Brown, a senior research strategist at Pepperstone Group Ltd. “To my mind, the path of least resistance continues to lead to the upside, and dips remain buying opportunities.”
The market is focusing on progress in US-China trade talks. While President Donald Trump reiterated his threat to follow through on a tariff hike on Chinese goods “if there isn’t a deal” by Nov. 1, he said he plans to meet with President Xi Jinping next week.
Investors are also awaiting delayed US inflation data due Friday for clues on the health of the economy and the Federal Reserve’s rate path. The UK will report inflation numbers on Wednesday.
“While earnings will remain in focus, particularly any updates on demand trends, international exposure post-tariffs, and their impact on profitability and capex, I think this week’s key events will be the inflation releases in the UK and US,” said Susana Cruz, a strategist at Panmure Liberum, “Both are still running hot and expected to rise further. Any upside surprises there could easily derail the rally.”
The Stoxx Europe 600 index was little changed, hovering near a record high. Miners were the biggest decliners after prices of gold and silver slumped due to the stronger dollar.
What Bloomberg Strategists say…
“The abrupt turn lower in gold prices weighed on equity markets given their correlation of late, but stocks should be able to shake it off pretty quickly. …That correlation is only likely to hold up in the very short term however as the gold prices won’t have much impact on the long term profitability of the large majority of firms (miners being the obvious exception).”
— Conor Cooper, Macro Squawk. Click here to read the full analysis.
Among individual movers in Europe, Eurofins Scientific SE dropped 9% after third-quarter results. Edenred SE jumped as much as 15%, the most on record, after the digital platform for services and payments reported better revenue growth for the third quarter. Assa Abloy AB gained as much as 3.4% after the Swedish lock and entrance systems group reported reassuring results.
Japanese shares pared earlier gains as Takaichi won the lower house of parliament vote to become prime minister on Tuesday, effectively making her the first woman to clinch the nation’s top leadership job.
The benchmark Nikkei 225 had nearly hit 50,000 earlier Tuesday, Pictet Asset Management Japan Ltd. head of investment strategy Jumpei Tanaka said, adding that “some profit-taking likely emerged as a reaction to that earlier rally.”
The Treasury 10-year yield traded below 4% as falling oil prices eased concern about inflation before Friday’s consumer-price data announcement. Brent crude oil hovered close to $60 a barrel, heading for the lowest close since May. Gold slipped.
Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 5:35 a.m. New York time Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average fell 0.1% The Stoxx Europe 600 was little changed The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.1% to $1.1626 The British pound fell 0.1% to $1.3390 The Japanese yen fell 0.7% to 151.76 per dollar Cryptocurrencies
Bitcoin fell 3% to $107,842.26 Ether fell 3.2% to $3,871.5 Bonds
The yield on 10-year Treasuries declined one basis point to 3.97% Germany’s 10-year yield was little changed at 2.57% Britain’s 10-year yield declined one basis point to 4.49% Commodities
West Texas Intermediate crude was little changed Spot gold fell 1.9% to $4,273.05 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy and Eman Abouhassira.
©2025 Bloomberg L.P.
