Stocks Rally on Trade Optimism Ahead of Big Week: Markets Wrap
(Bloomberg) — Equities rallied as signs that the US and China were closing in on a trade deal stoked optimism at the start of a bumper week in which the Federal Reserve and earnings from tech giants will also shape markets.
S&P 500 futures climbed 0.9%, putting the benchmark on course to extend its record run after US and Chinese officials said they’d reached a series of agreements ahead of a meeting between President Donald Trump and Xi Jinping. Nvidia Corp. jumped 2.3% in premarket trading, leading gains among Magnificent Seven megacaps. Nasdaq 100 contracts rose 1.3%.
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Gold slipped and Treasuries fell across the curve as demand for traditional havens waned. Copper — a bellwether for global growth — neared an all-time high. The dollar weakened against all major peers except the Swiss franc. In Europe, Spain’s stock benchmark surpassed a 2007 record.
Easing trade tensions between the world’s largest economies are giving investors fresh confidence to extend equities’ rally from April lows, when markets slumped as Trump moved to rewrite global trade rules. That advance faces key tests this week, with the Fed expected to cut interest rates and earnings from major tech firms set to offer clues on profit durability.
“The shift of attention to the negotiations with China is causing the markets to open higher, but only a positive outcome will be sustainable,” said Guillermo Hernandez Sampere, head of trading at asset manager MPPM. “This week could be crucial for the course of the rest of the year, with the greatest focus on the Federal Reserve’s wording regarding monetary policy.”
Top negotiators from the US and China came to terms on a range of contentious points, paving the way for Trump and Xi to finalize a trade deal and ease tensions that have rattled global markets in recent weeks. The Chinese Communist Party’s official mouthpiece called on the world’s biggest economies to “jointly safeguard hard-won achievements” from their latest talks.
What Bloomberg strategists say…
There will be very few willing now to take the risk of missing out on a relief rally given the positive noises coming from both the US and China. There are other drivers that will help spur investors to pile into stock markets — a Fed rate cut is priced in for this week’s meeting, and investors are anticipating that earnings from tech giants will reinforce the AI boom as a key driver for broader market gains.
“Fears around the Trump–Xi summit are dissipating, with the tone turning more conciliatory and Bessent suggesting a 100% tariff scenario is practically off the table,” said Susana Cruz, strategist at Panmure Liberum. “Cyclical sectors are likely to benefit the most.”
Argentina’s dollar bonds rallied as President Javier Milei’s party won Sunday’s midterm vote, easing investor concerns that his economic overhaul of the crisis-prone nation would stall.
Separately, Treasury Secretary Scott Bessent said the candidate pool for the next Fed chair has been narrowed to Christopher Waller, Kevin Warsh, Kevin Hassett, Michelle Bowman, and Rick Rieder.
Bessent, who is leading interviews for the position, said he’s planning to do a second round of interviews and hopes to present a “good slate” to Trump after the Thanksgiving holiday.
Traders will be looking ahead to a busy week of central bank announcements that includes rate decisions from the Fed, the European Central Bank and the Bank of Japan.
Meanwhile, on Wednesday and Thursday, five firms that account for about a quarter of the S&P 500 Index — Microsoft Corp., Alphabet Inc., Meta Platforms Inc., Amazon.com Inc. and Apple Inc. — will report their earnings.
“The main event will be the rate cut by the Fed and the Mag Seven earnings,” said Joachim Klement, strategist at Panmure Liberum. The “earnings may cause volatility as some investors have become worried about an AI bubble, and will look for signs that growth is slowing.”
Corporate News:
French billionaire Bernard Arnault has long sought to tighten his control over LVMH, the luxury conglomerate he founded almost four decades ago. This year, his efforts have gone into overdrive. Barclays Plc is re-entering Saudi Arabia, becoming the latest bank to beef up operations in the oil-rich kingdom that’s in the midst of a trillion-dollar economic transformation plan. Novartis AG agreed to buy biotechnology company Avidity Biosciences Inc. in a deal that values it at $12 billion, according to the Swiss drugmaker, making it the company’s biggest acquisition in more than a decade. HSBC Holdings Plc will set aside $1.1 billion to cover litigation by investors who lost money in Bernard Madoff’s fraud, the latest global bank to face a significant hit from litigation dating back years. Boeing Co. factory workers in St. Louis narrowly rejected a new five-year contract that would boost wages by an average of 24%, extending a nearly three-month strike that has disrupted the company’s main military manufacturing hub. Seres Group Co. started taking investor orders for a Hong Kong listing that may raise as much as HK$13.2 billion ($1.7 billion), making the electric-vehicle maker the latest big Chinese company to go public in the financial hub. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.9% as of 6:32 a.m. New York time Nasdaq 100 futures rose 1.3% Futures on the Dow Jones Industrial Average rose 0.5% The Stoxx Europe 600 was little changed The MSCI World Index rose 0.2% Currencies
The Bloomberg Dollar Spot Index fell 0.1% The euro was little changed at $1.1638 The British pound rose 0.2% to $1.3343 The Japanese yen was little changed at 152.84 per dollar Cryptocurrencies
Bitcoin rose 1.9% to $115,434.72 Ether rose 2.7% to $4,170.67 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.02% Germany’s 10-year yield advanced one basis point to 2.64% Britain’s 10-year yield was little changed at 4.44% Commodities
West Texas Intermediate crude fell 0.7% to $61.07 a barrel Spot gold fell 2% to $4,032.01 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Anand Krishnamoorthy and Neil Campling.
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