Stocks Waver as US Reopens to Clouded Rate Outlook: Markets Wrap
(Bloomberg) — US stock futures struggled for direction as traders grappled with the outlook for interest rates after the longest government shutdown in history came to an end.
Contracts on the S&P 500 swung between small gains and losses, with much of the optimism over the US reopening priced in after the index rose more than 2% in recent days. Europe’s Stoxx 600 was poised to outperform the US benchmark for a third straight session. US Treasuries were little changed while the dollar slipped. Gold rose for a fifth day.
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After a breathtaking rally since April, markets have endured a tumultuous few weeks as traders contended with a data blackout and mounting concern over lofty tech valuations. Investors are now bracing for further volatility as the government resumes releasing economic figures, with markets not yet settled on the Federal Reserve’s next steps.
Money markets now see about even odds of a Federal Reserve cut next month, after wagers swung in the past week as traders weighed signals about a weakening labor market and fragile consumer sentiment against lingering inflation concerns.
“There will be some caution around upcoming employment and inflation releases, particularly as we approach the Fed meeting that Powell has encouraged markets to treat with care,” said Florian Ielpo, head of macro and multi asset at Lombard Odier Investment Managers.
Tech stocks continued to lag the broader market in premarket trading amid concerns that the the artificial-intelligence-led rally has gone too far, too fast. Investors have shunned tech in the past few sessions in favor of defensive and value shares as traders trimmed their exposure to risk.
Meta Platforms Inc. was the only member of the Magnificent Seven to trade higher as Nvidia Corp. fell 0.7%. Drugmakers Merck & Co. Inc. and Bristol-Myers were among the notable large-cap gainers. Cisco System Inc. jumped after raising its 2026 forecast.
“There’s a rotation going at the moment from stocks and indexes which outperformed this year, in favor of laggards,” said David Kruk, head of trading at La Financiere de l’Echiquier. “It’s both healthy for the market and absolutely not negative in terms of the direction of travel.”
In the UK, economic growth almost ground to a halt in the third quarter amid fear of looming tax hikes in the Labour government’s upcoming budget. The pound dipped against the dollar after the data, but the move reversed as the US currency fell more broadly. Gilts were broadly steady.
Corporate News:
Cisco Systems Inc. shares jumped in early trading trading after the network-equipment giant boosted its 2026 forecast, showing progress in its effort to capture more artificial intelligence spending. Burberry Group Plc’s sales rose as the UK fashion brand saw demand improve in the region that includes China, an indication its turnaround bid is starting to work. The shares gained as much as 5.3%. Alibaba Group Holding Ltd. is preparing an overhaul of its main mobile AI app in coming months to help it more closely resemble OpenAI’s ChatGPT. The shares rose. Novo Nordisk A/S is looking to raise €3.5 billion ($4.1 billion) from the bond market to help finance its acquisition of Akero Therapeutics Inc. Siemens AG expects currency headwinds to “strongly” burden growth in revenue as well as profit during the 2026 fiscal year while the manufacturer also deals with costs related to recent acquisitions. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.1% as of 10:22 a.m. London time S&P 500 futures were little changed Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index rose 0.4% The MSCI Emerging Markets Index rose 0.3% Currencies
The Bloomberg Dollar Spot Index fell 0.2% The euro rose 0.3% to $1.1623 The Japanese yen rose 0.2% to 154.53 per dollar The offshore yuan rose 0.2% to 7.0982 per dollar The British pound rose 0.2% to $1.3162 Cryptocurrencies
Bitcoin rose 1.2% to $103,153.28 Ether rose 2.6% to $3,511.99 Bonds
The yield on 10-year Treasuries was little changed at 4.07% Germany’s 10-year yield was little changed at 2.65% Britain’s 10-year yield was little changed at 4.40% Commodities
Brent crude rose 0.2% to $62.84 a barrel Spot gold rose 1% to $4,237.56 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Neil Campling, James Hirai and Julien Ponthus.
©2025 Bloomberg L.P.
