U.S. stocks experienced gains ahead of Friday’s crucial jobs report, following a turbulent week marked by mixed earnings from major technology companies. Oil prices also rose due to renewed tensions in the Middle East. Premarket trading saw shares of Amazon.com Inc. and Intel Corp. rise sharply, while Apple Inc. faced a decline after reporting weaker demand in China. Despite the uptick, the S&P 500 is on track for its worst weekly performance in over a year, largely due to concerns regarding the future of artificial intelligence and cloud computing following earnings reports from Microsoft Corp. and Meta Platforms Inc.
Today’s payrolls report is expected to reveal a slowdown in job growth, coinciding with a recent inflation measure favored by the Federal Reserve, which recorded its largest monthly increase since April. This uncertainty complicates predictions ahead of next week’s Federal Reserve policy meeting, where market expectations for interest rate easing have decreased from 24 to 20 basis points this week.
Investor sentiment is further strained by the upcoming U.S. election, reflected in the rise of the CBOE Volatility Index, often referred to as the Fear Gauge, to levels last seen during the market upheaval in August. Adam Turnquist, chief technical strategist at LPL Financial, noted, “The highly anticipated employment report, a busy week of earnings including several from the Magnificent Seven, rising yields, and the upcoming U.S. election are all contributing to market anxiety. We may need to wait until after Election Day for volatility to stabilize.”
In Europe, the Stoxx Europe 600 index climbed 0.5%, although it is still poised for its largest weekly decline in two months. Gains in energy stocks bolstered the index, with major oil companies like Shell Plc, Total Energies SE, and BP Plc increasing by over 1% as oil prices surged.
Reckitt Benckiser Group Plc saw a significant jump of 10% after a jury ruled in favor of one of its units, clearing it of allegations that it concealed health risks associated with a formula for premature infants.
In the bond market, U.S. Treasuries remained steady following slight gains on Thursday, though October marked the worst month for Treasuries in two years due to extensive selling, reflecting a reassessment of U.S. interest rates amid signs of economic resilience.
The dollar rebounded after two days of losses, while the yen weakened after a brief gain. Comments from Bank of Japan Governor Kazuo Ueda suggested that currency fluctuations significantly impact the economy.
In Asia, equities declined, with the region facing its longest weekly losing streak in over two years due to disappointing earnings and tech stock declines mirroring U.S. market trends. Japanese stocks led the losses, while benchmarks in Australia and South Korea also fell. Conversely, Chinese equities rose, supported by improving property sales data and a surprise uptick in manufacturing activity, indicating that recent stimulus measures may be effective.
Oil prices extended their gains following reports of Iran planning a significant retaliatory strike on Israel through allied militias in Iraq, with West Texas Intermediate trading above $70 a barrel.
Key Economic Events This Week:
- U.S. employment data
- ISM manufacturing report
Market Highlights:
Stocks: Stoxx Europe 600 up 0.4%; S&P 500 futures up 0.2%; Nasdaq 100 futures up 0.4%; Dow Jones futures up 0.1%; MSCI Asia Pacific Index down 0.6%; MSCI Emerging Markets Index up 0.2%.
Currencies: Bloomberg Dollar Spot Index up 0.1%; euro down 0.2% to $1.0858; Japanese yen down 0.4% to 152.60 per dollar; offshore yuan down 0.1% to 7.1311 per dollar; British pound steady at $1.2909.
Cryptocurrencies: Bitcoin down 0.8% to $69,375.76; Ether down 0.4% to $2,508.78.
Bonds: 10-year Treasuries yield stable at 4.29%; Germany’s 10-year yield up one basis point to 2.40%; Britain’s 10-year yield up three basis points to 4.48%.
Commodities: Brent crude up 2.3% to $74.51 a barrel; spot gold up 0.3% to $2,752.80 an ounce.
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