Stock rally gains momentum as payrolls data awaited

by Cecile Gutscher and Julien Ponthus

A global rally in stocks gained momentum before key US payrolls data on hopes for a detente in the trade war between the US and China.

Europe’s Stoxx 600 index rose 0.9%, advancing for a ninth day in the longest winning streak in almost a year. S&P 500 futures climbed and 10-year Treasuries were steady. The dollar weakened.

The S&P 500 has notched eight consecutive days of gains — the longest run since August — amid increased optimism that trade tensions are waning since President Donald Trump unveiled century-high levies last month.

“It seems we may have reached peak policy uncertainty,” said Kevin Thozet, a member of the investment committee at Carmignac in Paris. “There are talks ongoing, and Trump seems to have watered down some of his policies.”

As investors turn their attention to monthly data on US payrolls to help them assess how much damage the trade war has wreaked on the US economy, bets are rising the Federal Reserve will be forced to accelerate interest rate cuts to head off an economic slowdown. 

Money markets pricing in almost four quarter-point rate cuts in 2025, one more than was anticipated before Trump’s tariff announcement on April 2. The labor data could test those assumptions.

“Investors may be overly optimistic over upcoming interest rate cuts,” Thozet said.

Apple shares slipped 2.6% in premarket trading after sales from China declined more than anticipated in the latest quarter, overshadowing otherwise solid results. Meanwhile, Amazon.com Inc. dropped 2% in the premarket after its operating income forecast missed expectations.

Asian shares jumped 1.6% as China assessed negotiations after senior US officials signaled they were prepared to meet. Trump had repeatedly said President Xi Jinping needs to contact him in order to begin talks. Earlier this week, Treasury Secretary Scott Bessent said it’s up to Beijing to take the first step to de-escalate the dispute.

While expressing a newfound openness to talks, China’s Commerce Ministry framed its statement as being consistent with Beijing’s previous position. As a condition to negotiations, China asked the US to show its sincerity and be prepared to correct its “wrong practices” by scrapping the unilateral tariffs. 

Meanwhile, Trump is asking Congress for deep cuts to domestic agencies and a boost to the military in a preliminary outline of his 2026 budget request to be released Friday.

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.9% as of 9:25 a.m. London time
• S&P 500 futures rose 0.5%
• Nasdaq 100 futures rose 0.3%
• Futures on the Dow Jones Industrial Average rose 0.6%
• The MSCI Asia Pacific Index rose 1.7%
• The MSCI Emerging Markets Index rose 2%

Currencies

• The Bloomberg Dollar Spot Index fell 0.4%
• The euro rose 0.3% to $1.1324
• The Japanese yen rose 0.2% to 145.12 per dollar
• The offshore yuan rose 0.5% to 7.2445 per dollar
• The British pound was little changed at $1.3291

Cryptocurrencies

• Bitcoin rose 0.2% to $96,637.4
• Ether fell 1% to $1,821.96

Bonds

• The yield on 10-year Treasuries declined one basis point to 4.21%
• Germany’s 10-year yield advanced two basis points to 2.47%
• Britain’s 10-year yield declined five basis points to 4.43%

Commodities

• Brent crude rose 0.2% to $62.27 a barrel
• Spot gold rose 0.6% to $3,258.55 an ounce

This story was produced with the assistance of Bloomberg Automation.

Copyright Bloomberg News