US Stocks Rise as Ceasefire Holds – Nasdaq up 1%
US equities rallied in the latest session as markets took confidence from a fragile ceasefire in the Middle East that continues to hold, despite ongoing reports of intermittent missile strikes across the region. The improvement in risk sentiment saw the Dow Jones rise 0.73% to 49,298, the S&P 500 gain 0.81% to 7,259, and the Nasdaq outperform with a 1.03% advance to 25,326. In fixed income markets, US Treasury yields eased modestly, with the 2-year yield falling 1.2 basis points to 3.940% and the 10-year yield declining 1.4 basis points to 4.424%. In currency markets, the US dollar traded in a choppy range but ultimately finished little changed, edging just 0.02% higher to 98.48. Commodities saw some divergence on the session. Oil prices moved lower on hopes that geopolitical tensions may not escalate further, although they remain at elevated levels overall. Brent crude fell 3.56% to $110.37, while WTI declined 3.90% to $102.37. In contrast, gold prices pushed higher, rising 0.79% to $4,556.04, as underlying uncertainty continues to underpin demand for safe-haven assets.
US Jobs Data in Focus for Fundamentals this Week
Geopolitical updates have again been dominating market commentary this week, as markets swing on a daily and sometimes hourly basis depending on sentiment from the latest updates on the Middle East. However, some crucial US data could be slipping by that could have a significant effect on markets further down the track. US jobs numbers are being released throughout the week, culminating in the blue-riband Non-Farms numbers on Friday, and there are some concerns that if they come in strongly, indicating a resilient employment picture in the US, then we may be wiping the prospect of Fed rate cuts off the table. Inflation concerns have been front of mind for many in terms of Fed thinking, with the war with Iran pushing out rate cut expectations. However, if the jobs numbers combine with sticky inflation, we could see some strong moves in markets in the coming months, with yields remaining elevated and the dollar pushing higher.
Geopolitics to Dominate Trading Sessions Again Today
Looking ahead, the economic calendar is relatively quiet, which is likely to keep market focus firmly on geopolitical developments—particularly any updates out of the Gulf region. We have already seen some data out early in the Asian session, with New Zealand employment data coming in close to expectations: the quarterly change coming in lower than expected, but the unemployment rate also dipping by 0.1% to 5.3%, showing a slight improvement. Later in the day, the focus will remain on the Land of the Long White Cloud, with the RBNZ Governor set to speak from Wellington. The London session has very little of note on the calendar today; however, we do have another US jobs update shortly after the New York open. This time, the ADP Non-Farm Employment Change numbers are due out, with the market expecting a 118k rise last month. Ivey PMI data (exp. 49.9) is due out of Canada later in the day, and we are also set to hear from several central bankers, including the Fed’s Alberto Musalem and Austan Goolsbee, as well as Bank of Canada Governor Tiff Macklem, towards the end of the day.
Explore all upcoming market events in the Economic Calendar.
