(Bloomberg) — Stocks staged a modest rebound from a technology-led selloff, setting a steadier tone at the outset of a month that could bring plenty of tests to markets trading near record highs.
Europe’s Stoxx 600 advanced 0.2%. BAE Systems Plc and Rheinmetall AG led gains in defense shares after the Financial Times reported that Europe is working on detailed plans for potential post-conflict deployments in Ukraine. A regional gauge for tech stocks held steady.
Asian equities were mixed, with a 19% surge in Alibaba Group Holding Ltd. contrasting with a slump in chipmaking shares. S&P 500 and Nasdaq 100 futures edged 0.1% higher, with cash trading in US stocks and Treasuries closed for the Labor Day holiday. The dollar was little changed.
In commodity markets, silver rose above $40 an ounce for the first time since 2011. Gold inched closer to an all-time high as optimism grew for an interest rate cut by the Federal Reserve this month.
Wall Street’s rally to all-time highs faces a crucial stretch, with jobs numbers, inflation data and the Fed’s rate call all landing within the next three weeks. The flurry of events will help determine whether stocks can extend gains or lose momentum as traders navigate what is historically the weakest month of the year for US markets.
Tariff tensions and questions over the Fed’s independence are compounding the risks.
“The bar to derail a Fed Rate cut on Sept. 17 appears high,” Deutsche Bank AG economist Peter Sidorov wrote. “But with Fed funds futures now pricing over 140 basis points of easing by the end of 2026, markets are expecting an amount of easing that since the 1980s has only occurred around recessions.”
European bonds weakened broadly, with a week to go before a confidence vote that could topple France’s government and deliver another setback to efforts to rein in the euro area’s biggest deficit. The French-German 10-year spread, a key measure of risk, was little changed at 78 basis points. The gauge closed at 82 on Aug. 27, the highest since January.
“I wouldn’t be surprised to see the spread between Germany and France test 100 basis points,” said Alexandre Baradez, chief market analyst at IG in Paris. “This could encourage further profit selling in European banking stocks, moreover since the European Central Bank seems to be on pause when it comes to rate cuts.”
Elsewhere, Indonesian stocks tumbled the most in nearly five months as political risks flared, with President Prabowo Subianto canceling a China trip after deadly unrest over living costs and inequality. Stress also was evident in the bond market, with yields on the nation’s 10-year government note rising to the highest in almost three weeks.
Corporate News:
New World Development Co.’s controlling shareholder, the billionaire Cheng family, is considering injecting capital into the debt-laden builder as early as the end of the year, Bloomberg News has reported. Equinor ASA said it intends to subscribe for new shares in wind developer Orsted A/S, the first major investor after the Danish government to back the sale. OpenAI is seeking to build a massive new data center in India that could mark a major step forward in Asia for its Stargate-branded artificial intelligence infrastructure push. CapVest Partners is nearing a deal to acquire Stada Arzneimittel AG for around €10 billion ($11.7 billion) including debt, potentially ending the long-running saga to sell the German drugmaker, according to people familiar with the matter. Alibaba Group Holding Ltd.’s stock leapt more than 18% after reporting a surge in revenue from AI, underscoring the steady progress it’s making against rivals in a post-DeepSeek Chinese development frenzy. BYD Co. shares fell after reporting a staggering 30% plunge in quarterly profit last Friday, its first decline in over three years, it’s become clear that not even dominant players are safe in the cutthroat battle for market share. Some of the main moves in markets:
Stocks
The Stoxx Europe 600 rose 0.2% as of 10:52 a.m. London time S&P 500 futures rose 0.1% Nasdaq 100 futures rose 0.1% Futures on the Dow Jones Industrial Average were little changed The MSCI Asia Pacific Index rose 0.2% The MSCI Emerging Markets Index rose 0.7% Currencies
The Bloomberg Dollar Spot Index was little changed The euro rose 0.3% to $1.1723 The Japanese yen was little changed at 147.04 per dollar The offshore yuan fell 0.1% to 7.1314 per dollar The British pound rose 0.2% to $1.3534 Cryptocurrencies
Bitcoin rose 0.5% to $109,649.7 Ether was little changed at $4,452.35 Bonds
The yield on 10-year Treasuries was little changed at 4.23% Germany’s 10-year yield advanced two basis points to 2.74% Britain’s 10-year yield advanced two basis points to 4.74% Commodities
Brent crude rose 0.9% to $68.12 a barrel Spot gold rose 0.6% to $3,469.27 an ounce This story was produced with the assistance of Bloomberg Automation.
