Stocks Rise With US Futures, Brent Extends Decline: Markets Wrap
(Bloomberg) — Stocks rose and futures pointed to more gains after the US described talks with China as “very successful” ahead of a summit between Presidents Donald Trump and Xi Jinping this week. Oil fell for a fourth day.
Gains in technology shares lifted Asian equities 0.8%, putting the MSCI All Country World Index — the broadest measure of global stocks — on course for a third straight advance, its longest winning streak since late August. Futures pointed to the gains spreading to Europe and Wall Street, with S&P 500 contracts rising 0.4% and those on the Nasdaq 100 Index gaining 0.6%.
Supporting sentiment, Brent dropped 1.3% to $102.51 a barrel, set for its longest losing run since June, as traders tracked diplomatic efforts to end the US-Iran war and signs cargoes are getting through the Strait of Hormuz.
Lower energy prices eased inflation concerns, lifting Treasury futures, with cash trading closed during Asian hours for a holiday in Japan. German bund futures rose after Chancellor Friedrich Merz said he would stay put even after his party suffered its worst-ever result in a state election.
With little major economic data due in the next few days, attention will turn to the Trump-Xi summit following a week in which the Federal Reserve raised interest rates for the first time since 2023 and the Bank of Japan lifted borrowing costs in a split decision. The US-China talks add another layer of caution for markets already grappling with the Iran war, inflation concerns, heavy AI spending and elevated global bond yields.
“Investors will welcome the more constructive tone going into Thursday’s meeting,” said Mohit Mirpuri, a senior partner at SGMC Capital Pte in Singapore. “Expectations for a major breakthrough are fairly contained, so even signs that both sides want to keep the trade relationship stable, maintain dialogue and avoid another escalation would be supportive for Asian risk sentiment.”
US and Chinese officials met in New York, with discussions led by Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. The two sides agreed to set up a dialogue on AI aimed at reaching a common understanding on goals and threats, Bessent said. China described the talks as positive.
What Bloomberg Strategists Say…
“A Goldilocks mood is spreading across markets, with crude oil falling, equities climbing and Treasury futures edging higher. The catalyst appears to be the ‘very successful’ opening talks between Scott Bessent and his Chinese counterparts, setting the stage for more positive sound bites when Donald Trump and Xi Jinping meet later this week.”
— Mark Cranfield, MLive Strategist. Click here for the full analysis.
The US and China have been working to reduce levies on American energy and agricultural products, part of a broader initiative to ease barriers on $30 billion worth of products from each side under the Board of Trade mechanism launched earlier this year. Since the two leaders last met in May, AI has emerged as a new flashpoint between the US and China.
“The Trump-Xi meeting could be more about positive optics rather than concrete policy changes,” said Tim Waterer, chief market analyst at KCM Trade. “The key will be whether we get an extension of the current trade truce. I suspect we will.”
Elsewhere, gold was a touch weaker at about $4,360 an ounce. Wheat and corn futures rose after the positive US-China talks.
Meanwhile, oil and liquefied natural gas shipments through Hormuz reached their highest level in six months over the past two weeks, a sign that US naval protection and mine-clearance efforts are “paying off,” a regional US commander said.
“Clearly, momentum is building,” Admiral Brad Cooper, head of US Central Command, said in a video message Saturday. The strait’s primary transit lanes are clear of mines, while Persian Gulf allies have shipped more than 1 billion barrels of crude through the waterway “in the last couple months,” he said.
Corporate News:
Societe Generale SA Chief Executive Officer Slawomir Krupa increased the profitability target as he aims to cut costs and boost investor payouts with a new strategy. Tens of thousands of workers across Germany plan to stage protests on Monday, seeking protection for jobs and factories after Volkswagen AG delivered another stark demonstration of the depths of the country’s auto-industry downturn. 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 Monday. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.4% as of 6:50 a.m. London time Nasdaq 100 futures rose 0.6% The MSCI Asia Pacific Index rose 0.8% The MSCI Emerging Markets Index rose 1% Australia’s S&P/ASX 200 was little changed Hong Kong’s Hang Seng rose 0.6% The Shanghai Composite rose 0.6% Euro Stoxx 50 futures rose 0.6% Currencies
The Bloomberg Dollar Spot Index was little changed The euro fell 0.1% to $1.1473 The Japanese yen fell 0.1% to 157.08 per dollar The offshore yuan was little changed at 6.6956 per dollar The British pound fell 0.1% to $1.3377 Cryptocurrencies
Bitcoin rose 0.6% to $81,540.12 Ether rose 1.2% to $2,664.83 Bonds
Australia’s 10-year yield advanced three basis points to 5.29% Commodities
Spot gold fell 0.6% to $4,351.01 an ounce West Texas Intermediate crude fell 1.5% to $98.79 a barrel This story was produced with the assistance of Bloomberg Automation.
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