Stocks Rise in Upbeat Start to Week as Oil Drops: Markets Wrap
(Bloomberg) — Stocks and bonds are getting a boost in an upbeat start to the week as oil fell and positive anticipation built ahead of a summit between US President Donald Trump and China’s Xi Jinping.
S&P 500 futures advanced 0.7%, while those for the Nasdaq 100 climbed 1%. The dollar was flat. Ten-year Treasury yields dropped five basis points to 4.95% as a fourth straight decline in oil prices eased concerns about the inflationary impact of energy costs. Bitcoin touched the highest level since January, lifting crypto-linked stocks in early trading.
Oil’s retreat got fresh momentum as traders tracked diplomatic efforts to ease tensions between the US and Iran and lift crude shipments from the Middle East. Trump told Fox News he would “probably” be open to meeting Iranian President Masoud Pezeshkian on the sidelines of the UN General Assembly this week.
In a sign that US naval protection and mine-clearing efforts in the Strait of Hormuz were paying off, a regional US commander said oil and liquefied natural gas shipments through the waterway reached their highest level in six months. Meanwhile, US and Chinese officials offered upbeat assessments of their talks on artificial intelligence, trade and investment ahead of the Trump-Xi meeting.
The “feedback from the talks between China and the US is feeding a positive narrative as the week begins,” said Alexandre Baradez, chief market analyst at IG in Paris. “That said, for me oil prices remain the key driver.”
Lower oil and gas prices helped drive Europe’s Stoxx 600 higher, alongside gains in technology stocks. Regional bonds outperformed. Warner Bros. Discovery Inc. and Paramount Skydance Corp. rallied in US premarket trading as details emerged about settlement talks with California officials over Paramount’s planned acquisition of Warner.
The upbeat tone across many assets is offering investors some respite after concerns over inflation, fiscal largesse and heavy debt issuance by AI heavyweights drove yields to their highest in years, curbing risk appetite.
After the Federal Reserve raised interest rates last week for the first time since 2023, Chicago Fed President Austan Goolsbee warned Monday that officials have to respond to repeated supply shocks in a way that may cause economic hardship.
At a time when US retail diesel prices are topping $6.50 a gallon, Goolsbee said that while the Fed’s response to supply shocks doesn’t have to be as aggressive as it would be to overheating demand, it still won’t be painless.
“This is exactly the painful trade-off between employment and inflation that stagflationary shocks always impose on a central bank,” Goolsbee said Monday in prepared remarks for an event in London. “Unfortunately, in environments like that, the only way back is the hard way.”
In a week that features a relatively sparse US economic data calendar, S&P Global will release its preliminary September manufacturing and services PMIs. Both are projected to remain consistent with steady growth. Fed officials scheduled to speak in the coming days include John Williams, Philip Jefferson, Tom Barkin, Michael Barr, Beth Hammack and Anna Paulson.
What Bloomberg Strategists Say:
“Sentiment has started the week on a strong footing, with the bias for that to continue as trade negotiations culminate in Thursday’s Trump-Xi summit. Major central bank meetings are in the rearview mirror, Brent is falling for a fourth straight day and Bessent struck a constructive tone on US-China talks. Both sides have strong incentives to keep the momentum going.”
Corporate News:
The Qatar Investment Authority is targeting a $20 billion partnership with JPMorgan Chase & Co., people familiar with the matter said. Health and fitness ring-maker Oura Inc. and some of its backers are seeking to raise as much as $2.2 billion in an initial public offering. SoftBank Group Corp. is seeking the equivalent of more than $11 billion in what would be one of the biggest junk bond deals ever, people familiar with the matter said. Societe Generale SA Chief Executive Officer Slawomir Krupa lifted the lender’s profitability target as he aims to cut costs and boost investor payouts with a new strategy. The settlement talks between Paramount Skydance Corp. and California officials over the planned acquisition of Warner Bros. Discovery Inc. are said to include a financial penalty if the company fails to make good on a promise to distribute 30 films per year in theaters. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.7% as of 8:34 a.m. New York time Nasdaq 100 futures rose 1% Futures on the Dow Jones Industrial Average rose 0.8% The Stoxx Europe 600 rose 1.2% The MSCI World Index rose 0.2% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1487 The British pound was little changed at $1.3392 The Japanese yen fell 0.3% to 157.36 per dollar Cryptocurrencies
Bitcoin rose 5.1% to $85,248.4 Ether rose 3.6% to $2,728.2 Bonds
The yield on 10-year Treasuries declined four basis points to 4.96% Germany’s 10-year yield declined seven basis points to 3.45% Britain’s 10-year yield declined eight basis points to 5.22% Commodities
West Texas Intermediate crude fell 2.5% to $97.76 a barrel Spot gold fell 0.5% to $4,357.09 an ounce This story was produced with the assistance of Bloomberg Automation.
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