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Good evening,
Wall Street kicked off the week with an active session, as benchmark indices enjoyed a strong day, led by Nasdaq’s outperformance on AMD’s massive rally. Both the S&P 500 and Nasdaq Composite closed at fresh record highs, underscoring the resilient mood in equities despite the government shutdown entering its sixth day. The S&P 500 accumulated a 14.5% gain this year, while the Nasdaq Composite is 19% higher. Europe’s broad Stoxx 600 index advanced 12% but the € appreciated 13% against the $.
Over the weekend, JPMorgan analysts highlighted a surge in precious metals and cryptos, describing the phenomenon as “dollar debasement”. Gold is racing toward an all-time high near $4,000, while Bitcoin has climbed above $125,000 following last week’s steep rally.
In forex markets, the DXY dollar index reversed recent weakness, gaining 0.4%, largely due to the sharp depreciation of the Japanese yen (~2%). The ¥ weakened after Japan’s ruling Liberal Democratic Party unexpectedly elected Sanae Takaichi as the next prime minister. Seen as a fiscal dove, Takaichi supports government stimulus measures to drive economic growth, fueling market concerns about fiscal and political stability. The Nikkei 225 rallied nearly 5% on Monday.
Core bond yields extended Friday’s upward momentum, moving a few basis points higher, with the 10-year UST yield reaching 4.17%.
Politics: France’s Prime Minister Lecornu has resigned after less than a month in office, following widespread criticism of his appointment. The resignation comes after Macron unveiled a largely unchanged cabinet lineup, sparking backlash over continuity and political strategy. Paris CAC 40 index fell 1.3% and the yield on 10-year French OATs closed 5bp higher today at 3.57%, the highest since 2011, and 85bp over Bunds.
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