Stocks Set to Advance, Gold Rises on Rate-Cut Bets: Markets Wrap
(Bloomberg) — Global shares held a three-day gain that took them to within touching distance of a record high as President Donald Trump signed legislation to end the longest government shutdown in US history.
Contracts for the S&P 500 Index rose 0.2% after the underlying gauge rose for four successive days on optimism over a resolution to the shutdown. Futures indicated European shares will set another record high. Asian shares edged up 0.4%. The MSCI All Country World Index swung between small gains and losses as investors stayed cautious ahead of the resumption of economic data, key to shaping the Federal Reserve’s interest-rate outlook.
Gold extended its advance for a fifth straight day, supported by expectations of further rate cuts once Washington returns to work.
With the US earnings season drawing to a close, markets are turning their focus to the Fed and prospects for rate cuts as the next catalyst to extend the rally from the April lows. The absence of key indicators — such as unemployment figures and October’s consumer price index — has fueled uncertainty around monetary policy, with the White House confirming those reports are unlikely to be released due to the shutdown.
“While the markets are pricing the end of the government shutdown, there is an even bigger mountain ahead of us, and that is the resumption of all of the economic data that we have missed,” said Michael Landsberg at Landsberg Bennett Private Wealth Management. “As the fog lifts, we will see if market positioning has been correct and it is still clear sailing or if there is a big repricing necessary.”
Trump’s signature marked the official conclusion to a 43-day impasse that halted food aid to millions of households, canceled thousands of flights and forced federal workers to go unpaid for more than a month.
The government can begin to resume normal operations, with federal workers expected back on the job starting Thursday. It could still take days, or even weeks, for the federal bureaucracy to fully restart and dig out of the backlog after being closed since Oct. 1.
“It’s a continuing resolution,” Jim Bianco, founder of Bianco Research, said in a Bloomberg TV interview. “We could be right back here in February.”
With the government shutdown delaying key economic data, the real challenge isn’t the short-term drag on growth — it’s the increasing difficulty for investors and the Fed to gauge the economic outlook, noted Seema Shah at Principal Asset Management.
“As data releases resume, the case for a Fed rate cut in December should re-emerge, reinforcing a risk-on backdrop,” she said. “This environment favors US equities, particularly Big Tech and cyclicals poised to benefit from a more accommodative Fed stance.”
However, in the latest comments from a US central bank official, Boston Fed President Susan Collins said she favored holding rates steady amid still-strong growth that could slow or stall progress on cooling inflation.
In trade news, the European Union is set to propose a plan to the US that would implement the next phase of the trade agreement the two sides reached this summer, according to people familiar with the matter. Top trade negotiators from Switzerland are headed to Washington, aiming to complete negotiations on a trade deal with the US that would lower the 39% tariff rate on Swiss goods.
Elsewhere, the Japanese yen was in focus as traders were increasingly skeptical that the country’s new government would be able to shore up the currency through direct intervention, as the yen slumped toward levels that previously drew authorities into the market. The yen hovered around 155 to the dollar.
In commodities, oil steadied after slumping the most since June as OPEC said crude supplies surpassed demand sooner than anticipated. Brent fell toward $62 a barrel after losing almost 4% in the previous session, while West Texas Intermediate was near $58. Energy stocks in Australia fell.
Also in Australia, stocks declined and shorter yields jumped after stronger-than-estimated jobs data damped expectations for rate cuts from the country’s central bank.
Corporate News:
Cisco Systems Inc. shares gained in late trading after the network-equipment giant boosted its 2026 forecast, showing progress in its effort to capture more artificial intelligence spending. Toyota Motor Corp. confirmed it will plow as much as $10 billion into the US over the next five years to boost its local operations. Anthropic PBC plans to spend $50 billion to build custom data centers for artificial intelligence work in several US locations, including Texas and New York, the latest expensive pledge for infrastructure to support the AI boom. Volkswagen AG and Rivian Automotive Inc. have ambitions of selling the electric vehicle technology they’re developing together to other carmakers in the future. Siemens AG set new near- and medium-term financial targets amid a revamp that includes trimming its stake in Siemens Healthineers AG to fund investments in software and artificial intelligence. Chinese battery stocks surged as Contemporary Amperex Technology Co.’s deal with an energy storage-system manufacturer stoked investor excitement about the sector. Alibaba Group Holdings Ltd. is preparing an overhaul of its main mobile AI app in coming months to help it more closely resemble OpenAI’s ChatGPT. Some of the main moves in markets:
Stocks
S&P 500 futures rose 0.2% as of 6:53 a.m. London time Nasdaq 100 futures rose 0.4% The MSCI Asia Pacific Index rose 0.4% Hong Kong’s Hang Seng rose 0.9% The Shanghai Composite rose 0.8% Euro Stoxx 50 futures rose 0.3% Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1584 The Japanese yen was little changed at 154.91 per dollar The offshore yuan rose 0.1% to 7.1046 per dollar The British pound was little changed at $1.3122 Cryptocurrencies
Bitcoin rose 1.6% to $103,495.42 Ether rose 3.7% to $3,548.61 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.09% Japan’s 10-year yield was little changed at 1.690% Australia’s 10-year yield advanced four basis points to 4.42% Commodities
Spot gold rose 0.4% to $4,210.85 an ounce West Texas Intermediate crude was little changed This story was produced with the assistance of Bloomberg Automation.
–With assistance from Abhishek Vishnoi and Michael G. Wilson.
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