US Stocks Hit Record Levels into the Weekend – Dow up 0.5%
US stocks drove higher again on Friday, with the S&P and Nasdaq both hitting the weekend at record levels. Trade deal optimism helped push the indices higher, and confirmation of a 15% tariff deal between the US and the EU yesterday should see markets start on the front foot today. The Dow closed up 0.47% on Friday, followed by the S&P, which added 0.40%, and the Nasdaq, which gained 0.24%. The dollar also gained ground, the DXY up 0.31% to 97.67, while Treasury yields were more muted— the 2-year up 0.7 of a basis point to 3.923%, while the 10-year lost 0.8 of a basis point to move back to 4.388%. Oil prices pulled back further to hit 3-week lows, as concerns about pending oversupply weighed on the market—Brent down 1.07% to $68.44 and WTI down 1.32% to $65.16 a barrel. Gold fell again as haven flows retreated further on positive market sentiment, off 0.93% on the day to close at $3,336.73 an ounce.
US Markets in Focus This Week
It is a huge week ahead for US markets, with a plethora of data due out and a Fed meeting taking place, with the latest interest rate update coming right in the middle of the week. Adding to the fundamental updates, President Trump’s tariff deadline is also due on Friday, and traders are expecting a flurry of updates ahead of that key date. Key jobs and inflation data look set to be the highlight of the week, with even more scrutiny being placed on the Fed updates after another expected hold on interest rates. Political pressure is being placed on Fed Chair Jerome Powell with regard to rate cuts, and if the data comes in strongly again, we could see more volatility in markets as they start to price in a much lower chance of a cut in September. This scenario would undoubtedly be unpopular in the White House and could open the way for further clashes in the near future—possibly even the exit of the Fed Chair.
Quiet Calendar Day to Kick Off a Big Week
It is a very quiet day on the macroeconomic calendar today, with little scheduled in the way of data releases or central bank updates. However, this is very much the calm before a pending huge storm later in the week, as the market will be hit with major US data and interest rate calls from the Fed, Bank of Japan, and Bank of Canada. Traders are expecting markets to kick off on the front foot today after confirmation of a trade deal between the US and EU came through on Sunday. But with so many potential pitfalls in the coming days, moves may be limited, with products trading in tighter ranges and maybe some profit-taking flows coming through.
