(Bloomberg/Rheaa Rao and Andre Janse van Vuuren) — Technology stocks drove an advance in global equities, with Alphabet Inc. and Alibaba Group Holding Ltd. notching gains as traders kick off a data-packed week.
Major US stock indexes extended their ascent, with the S&P 500 rising 1.4% and the tech-heavy Nasdaq 100 jumping more than 2%. Bitcoin fell again after a weekend rebound and is on track for its worst month since 2022. Oil swung between small gains and losses as traders weighed the prospect of a Ukraine-Russia peace deal. The US 10-year Treasury yield declined to 4.05%.
Federal Reserve Governor Christopher Waller fueled optimism on Monday after indicating support for an interest-rate cut next month. New York Fed President John Williams had a similar impact on the market on Friday after he said a near-term rate cut remains a possibility. While the central bank’s December meeting is the next big milestone for markets, investors are relying on dated economic data due to delays caused by the US shutdown.
There’s room for different interpretations on how the economy is doing because of ambiguity in the data given the lag, James Egelhof, chief US economist at BNP Paribas, said on Bloomberg Television Monday.
“It’s a more disorderly process than what we’re accustomed to,” he said. “At the same time, we think that Powell wants to keep cutting. He has the votes to do that. We think the data is giving a little cover to him to deliver one last rate cut to protect the labor market from gradual deterioration.”
Money markets are pricing in a roughly 70% chance of a Fed rate cut in December, after the odds fluctuated in recent weeks amid growing fissures among policymakers and the data blackout.
US stocks are gaining on Monday after a volatile week marked by concerns about lofty AI valuations and lack of clarity regarding the Fed’s path ahead. UBS Securities’ trading desk now thinks the selloff in US stocks may have run its course, especially with expectations for the Fed lowering rates next month seemingly back on track.
“I believe the combination of a reset of the equity market and the increased odds of a rate cut in Dec has propelled stocks higher and put the year end melt-up back on the table,” said Chris Murphy, Susquehanna International Group’s co-head of derivatives strategy.
What Bloomberg Strategists Say:
“US stocks enter the shortened Thanksgiving week in an oversold state, with recent volatility likely to fade and support a melt-up on broader participation.”
— Michael Ball, Macro Strategist, Markets Live
For the full analysis, click here.
Ahead of Thanksgiving and Black Friday, September retail figures due Tuesday are expected to show a moderation as consumers remain squeezed by high prices.
Other data due this week include the producer price index and durable goods orders for September. Jobless claims on Wednesday, covering the November survey week, will take on added importance as the Fed leans on alternative indicators in the absence of payroll figures.
“There are increasing signs that the economy remains sluggish, which will put additional emphasis on the retail sales release this week, although once more the data will be slightly historic,” said Richard Hunter, head of markets at Interactive Investor. “There will be some hopes that the recently guarded sentiment will at least temporarily be erased.”
Some of the main moves in markets:
Stocks
The S&P 500 rose 1.4% as of 11:26 a.m. New York time
The Nasdaq 100 rose 2.3%
The Dow Jones Industrial Average rose 0.6%
The Stoxx Europe 600 rose 0.4%
The MSCI World Index rose 1.1%
Currencies
The Bloomberg Dollar Spot Index was little changed
The euro was little changed at $1.1522
The British pound was little changed at $1.3102
The Japanese yen fell 0.3% to 156.87 per dollar
Cryptocurrencies
Bitcoin fell 0.8% to $87,246.34
Ether rose 0.5% to $2,855.57
Bonds
The yield on 10-year Treasuries declined one basis point to 4.05%
Germany’s 10-year yield was little changed at 2.70%
Britain’s 10-year yield was little changed at 4.55%
Commodities
West Texas Intermediate crude rose 0.5% to $58.33 a barrel
Spot gold rose 0.7% to $4,093.74 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Julien Ponthus, Lynn Thomasson, Natalia Kniazhevich and Denitsa Tsekova.
More stories like this are available on bloomberg.com
