Stocks climbed after the debt-ceiling deal passed its last Congressional hurdle, with traders now looking to US jobs data later Friday that may clarify the Federal Reserve’s policy path.
(Bloomberg) — Stocks climbed after the debt-ceiling deal passed its last Congressional hurdle, with traders now looking to US jobs data later Friday that may clarify the Federal Reserve’s policy path.
Futures on the S&P 500 and Nasdaq 100 rose, suggesting US equities may add to Thursday’s robust gains on Wall Street, with the tech-heavy Nasdaq set for a sixth straight weekly advance. Futures extended gains after Bloomberg reported that China is considering new stimulus measures to boost its ailing economy. The dollar dipped and the 10-year Treasury yield ticked higher.
The Stoxx Europe 600 index followed Asian benchmarks higher, with luxury-goods makers LVMH and Richemont among the leading gainers as a rally in Chinese stocks buoyed sentiment. Miners and energy companies soared as crude oil and industrial metals rebounded. Among individual movers, sportswear makers Puma SE and Adidas AG rose more than 4% each after Lululemon Athletica Inc.’s robust results. Dechra Pharmaceuticals Plc jumped after EQT AB made a firm offer for the UK veterinary drugmaker.
Tech giants are still driving most of the stock market’s advance, with Apple Inc. nearing a record and Nvidia Corp. climbing more than 5% Thursday. The sector accounted for more than half the $14.8 billion of inflows into US equity funds last week, according to EPFR data. Aside from the obsession for anything AI-related that drove megacaps up 17% in May, the industry also got a boost amid a slide in bond yields and better-than-estimated sales at Dell Technologies Inc.
Traders are betting that the monthly US jobs report will show enough moderation in the pace of hiring to allow the Fed to pause its tightening cycle, helping sustain the rally. Dovish comments from Fed officials supported this view: Fed Bank of Philadelphia President Patrick Harker said “we should at least skip this meeting in terms of an increase,” and his St. Louis counterpart James Bullard said interest rates may already be sufficiently restrictive to bring down inflation.
A pause is not a done deal, however, leaving stocks at risk of a reverse should the jobs data surprise to the upside.
“We are really ripe for some type of pullback,” Erin Gibbs, senior partner and chief investment officer for Main Street Asset Management, said on Bloomberg TV. “There is a little cautiousness, a little uncertainty as we get a clearer idea of how the Fed will act.”
Shares in Japan, Australia, China advanced while South Korea’s Kospi index was headed for bull market territory following a gain of more than 20% from a low in September. Hong Kong’s Hang Seng index rose more than 3%, pulling the benchmark back from the brink of a bear market following concerns about Chinese growth.
China is working on a new basket of measures to support the property market after existing policies failed to sustain a rebound in the ailing sector, Bloomberg reported Friday. The yuan extended gains and crude oil rose along with industrial metals. An index of emerging-market stocks soared the most since January.
Some of the main moves in markets:
Stocks
- S&P 500 futures rose 0.5% as of 5:31 a.m. New York time
- Nasdaq 100 futures rose 0.6%
- Futures on the Dow Jones Industrial Average rose 0.5%
- The Stoxx Europe 600 rose 1%
- The MSCI World index rose 0.6%
Currencies
- The Bloomberg Dollar Spot Index fell 0.2%
- The euro was little changed at $1.0764
- The British pound was little changed at $1.2532
- The Japanese yen was little changed at 138.89 per dollar
Cryptocurrencies
- Bitcoin rose 1% to $27,127
- Ether rose 1.2% to $1,891.68
Bonds
- The yield on 10-year Treasuries advanced two basis points to 3.62%
- Germany’s 10-year yield advanced four basis points to 2.29%
- Britain’s 10-year yield advanced three basis points to 4.15%
Commodities
- West Texas Intermediate crude rose 1.9% to $71.44 a barrel
- Gold futures were little changed
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Thyagaraju Adinarayan and Richard Henderson.
More stories like this are available on bloomberg.com
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