United States
A volatile week on Wall Street ended on a positive note as US stocks climbed, buoyed by comments from President Donald Trump that eased trade tensions with China and a rebound in regional banks. The S&P 500 rose 0.5% to mark its best week since August, while the Nasdaq 100 gained 0.7% and the Dow Jones added 0.5%.
Trump struck an optimistic tone, saying talks with Chinese officials were progressing well and signalling that his planned meeting with President Xi Jinping later this month would go ahead. His remarks calmed investor nerves after a turbulent week marked by renewed tariff concerns and a brief sell-off in US regional banks.
Financial stocks were among the strongest performers as solid results from regional lenders like Zions Bancorp and Western Alliance Bancorp reassured investors following Thursday’s sell-off linked to loan charge-offs. The SPDR S&P Regional Banking ETF rose 1.6%. Oracle tumbled nearly 7% after its long-term growth guidance fell short of AI-driven expectations.
Bond yields ticked higher as the yield on 10-year Treasuries rose three basis points to 4.00%, while two-year yields also edged up. The US dollar was little changed after recording its worst week since August. Meanwhile, gold and silver dropped 2.2% and 6% respectively, reflecting investors’ rotation back into equities.
Investors continue to grapple with the ongoing US government shutdown, which has frozen several key economic data releases. Despite the absence of official figures, Bloomberg’s state-level analysis suggested jobless claims fell to around 215,000 in the week to October 11, hinting at a still-resilient labour market.
Looking ahead, attention will shift to the second week of US earnings season, featuring results from heavyweights such as Coca-Cola, Netflix, Tesla, IBM, Intel and Ford. Market participants will be watching for signs that strong corporate profits can sustain the current bull market, which UBS says still “has further to run,” supported by AI momentum and a dovish Federal Reserve stance.
Europe
European equities retreated on Friday, weighed down by weakness in financials and industrials, even as Trump’s conciliatory comments toward China helped trim losses late in the session. The Stoxx 600 fell 0.9%, with banks, insurers and defence stocks leading the declines.
Novo Nordisk was one of the session’s biggest laggards, sliding 6.4% after Trump announced plans to cap the monthly cost of its blockbuster diabetes drug Ozempic at USD 150. By contrast, EssilorLuxottica surged 13% after its Meta-powered smart glasses drove a strong sales beat.
Defence firms had their worst week since 2020, with Rheinmetall and Siemens dropping sharply amid signs of progress in Trump’s peace talks efforts. The financial sector suffered its steepest fall in four months, dragged by declines in UBS, Allianz and Deutsche Bank following renewed credit concerns in US regional lenders.
The automotive sector bucked the trend, with Continental soaring more than 11% after posting a margin beat. Chemical producers also fared well, booking their best week since April as BASF and Givaudan gained on robust earnings.
Elsewhere, Man Group rallied 6.4% after assets under management reached a record high, while Porsche rose 1.6% as the company continued talks to appoint a new CEO. Utilities extended their winning streak to an eleventh session, closing at their highest level since 2008.
Australia
Australian shares are poised for a softer start to the week following Wall Street’s mixed cues and profit-taking at record highs. ASX 200 futures were down 8 points, or 0.1%, to 9,002, indicating a mild pullback after the local market’s strong performance last week.
Friday’s gains left the benchmark up 0.4% over the week, with sentiment buoyed by easing US-China tensions and expectations of continued central bank support. However, the focus now shifts to earnings updates and domestic data after last week’s labour report showed unemployment rising to 4.5%, its highest level in four years.
Money markets are pricing in a roughly 70% probability that the Reserve Bank of Australia will cut the cash rate by 25 basis points at its next meeting, given the combination of stubborn inflation and a cooling labour market. RBA Governor Michele Bullock is set to speak in Sydney on Friday, providing further guidance on the central bank’s policy path.
Today’s local watchlist includes Lynas, which remains in focus as China’s restrictions on rare earth exports continue to impact sentiment. Infratil is also active after announcing plans to acquire another 4.9% of Contact Energy for NZD 437.7 million. Vault Minerals will consolidate 13 shares into two as part of its restructuring plan.
In currency markets, the Australian dollar edged higher to 0.6494 USD, while the three-year government bond yield fell 6.3 basis points to 3.31%. Ten-year yields eased to 4.10%, reflecting growing expectations of a rate cut. ADRs for major miners traded lower in New York, with BHP down 1.2% and Rio Tinto off 1.1%.
Commodities and currencies
Oil prices edged higher, with West Texas Intermediate up 0.3% to USD 57.66 a barrel and Brent crude gaining 0.4% to USD 61.29. Despite the modest rise, both benchmarks remain under pressure amid growing concerns of oversupply and signs of slowing global demand.
Gold retreated sharply to USD 4,231 an ounce, its worst daily fall in months, as investors rotated out of safe havens following Trump’s efforts to calm geopolitical tensions. Silver also slumped more than 6%, trimming its recent rally.
The US dollar index was flat, the euro slipped to USD 1.167, and the pound held steady at USD 1.34. The yen remained under pressure around 150.5 per dollar. Bitcoin pulled back 1.3% to trade near USD 106,500, while Ether eased 0.7% to USD 3,826.
Economic Calendar
No Economic Releases
This article was written by James Woods, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
