Last Friday, global stock markets saw a boost as fears of a U.S. government shutdown started to fade and belief grew that China might introduce significant initiatives to enhance consumer demand.
Contracts on the S&P 500 climbed 0.8% following the likelihood of a stopgap funding bill moving forward in Congress. This positive move came as Senate Democratic leader Chuck Schumer chose not to impede the measure. Thursday had extended the index into a three-week decline exceeding 10%, marking it officially in correction territory. Meanwhile, Nasdaq 100 futures saw an increase of 1%.
According to economist Sophie Altermatt from Julius Baer & Co., the progress of the budget bill through Congress, despite some Democratic pushback, has positively affected the sentiment in the U.S., which might be influencing European markets as well. She added, “This provides some temporary relief amidst the numerous uncertainties arising from erratic policy decisions in the U.S.”
In Europe, the Stoxx 600 index experienced a rise of 0.4%, particularly in resources and consumer stocks. This was in part due to Beijing’s announcement to hold a news conference on Monday outlining measures to stimulate consumption, a move that also pushed the CSI 300 index, which represents mainland China stocks, to its highest level this year.
U.S. Treasuries, which saw a surge the previous session as investors rushed to secure assets and drove gold to record highs, gave back some of their gains. The dollar’s strength continued into Friday, marking the third consecutive day of gains, while the British pound weakened following unexpected news of an economic contraction in the UK at the beginning of 2025.
Sidestepping a government shutdown could alleviate one concern for traders who are already on edge about potential threats to the global economy, notably due to President Donald Trump’s tariff conflicts. The initial optimism on Wall Street, observed two months into Trump’s presidency, has shifted to anxiety as a $5 trillion equity loss looms, threatening the S&P 500 with its fourth consecutive week of losses.
The Bloomberg Markets Live Pulse survey indicates that investors are more bullish on Treasuries compared to stocks than they have been in the past three years. Gold remains strong, hovering just below the $3,000-per-ounce mark.
Despite this turmoil, some market strategists are optimistic that we might be nearing a market bottom. For instance, Michael Hartnett from Bank of America Corp. posits that a fresh bear market seems unlikely for Wall Street. He argues, “Any further decline in stock prices could trigger shifts in trade and monetary policy.” Although the S&P 500 has fallen 10% from its February peak, landing it in correction territory, a bear market would require a 20% drop from a recent high. Hartnett suggests purchasing the S&P 500 if it hits 5,300 points, roughly 4% below its current level.
In stock-specific news, BMW AG saw a sharp 4.5% drop in Europe due to weak sales in China and potential threats to U.S. deliveries. Meanwhile, Kering SA plunged by as much as 14% following its unexpected announcement of Demna Gvasalia as Gucci’s new artistic director.
On the commodities front, Brent crude futures increased by about 1% after the U.S. imposed further sanctions on Russia, restricting energy-related payments.
Here are some key events and movements in the markets this week:
– Stocks: By 6 a.m. in New York, S&P 500 futures were up 0.8%, Nasdaq 100 futures increased by 1%, and Dow Jones Industrial Average futures rose by 0.5%. The Stoxx Europe 600 moved up by 0.5%, while the MSCI World Index remained stable.
– Currencies: The Bloomberg Dollar Spot Index stayed steady, with the euro unchanged at $1.0852. The British pound experienced a slight dip of 0.2%, landing at $1.2927, and the Japanese yen decreased by 0.8% to 148.99 against the dollar.
– Cryptocurrencies: Bitcoin surged by 3.1%, reaching $82,813.26, and Ether increased by 2.9%, trading at $1,894.9.
– Bonds: The yield on 10-year Treasuries advanced by three basis points to 4.30%, Germany’s 10-year yield rose two basis points to 2.88%, and Britain’s 10-year yield edged up by one basis point to 4.69%.
– Commodities: West Texas Intermediate crude jumped 1.1% to $67.28 per barrel, while spot gold advanced by 0.3% to $2,998.64 an ounce.
This summary has been supported by Bloomberg Automation, with contributions from Richard Henderson. ©2025 Bloomberg L.P.
