Positive sentiment lifts global stocks as Fed pivots and investors eye resilient growth
Equity markets closed another week in the green, buoyed by optimism surrounding the Federal Reserve’s recent decision to ease interest rates and the ongoing strength of technology stocks on Wall Street. The Fed implemented a 25 basis point rate cut, its first in nearly a year, reinforcing investor expectations that a shift toward looser monetary policy may be underway, although at a cautious pace.
Encouraging signs in the broader economy, including robust retail sales and strong third-quarter GDP tracking, further lifted sentiment. Notably, the small-cap-focused Russell 2000 surged to a fresh all-time high, outperforming both the S&P 500 and Nasdaq indexes.
Market volatility persists as the job market cools
Despite the bullish momentum, markets experienced intermittent volatility as concerns over labour market softness lingered. Job growth is slowing to levels often linked to recessionary conditions, and unemployment is ticking higher, prompting traders to bet on additional rate cuts in the coming months. Compounding this uncertainty is the Federal Reserve’s limited forward guidance, which has left investors interpreting a range of possible policy paths.
This backdrop has been supportive for equities in general, especially cyclical and quality stocks. However, the road ahead may remain uneven, with key macroeconomic data, including employment, inflation, and growth, likely to influence future market moves. For now, investors remain hopeful that a blend of monetary easing and fiscal policy support will continue to uplift sentiment.
Weekly market recap
Here’s a look at how major markets around the world performed to start the week.
Mixed performance across Asia
Asian equity markets had a mixed start to the week. Japan’s Nikkei recovered following a dip driven by the Bank of Japan’s recent stance, while South Korea’s KOSPI gained ground after Samsung received approval to supply Nvidia with next-gen AI chips. Meanwhile, Chinese and Hong Kong markets lagged amid persistent tech-sector concerns, and Indian equities came under pressure due to new U.S. visa restrictions. Australia posted modest gains, while Singapore remained flat.
U.S. futures cautious ahead of key Fed speeches
U.S. equity futures edged slightly lower on Sunday evening, as investors awaited a flurry of economic data and upcoming remarks from Federal Reserve officials that could clarify the trajectory of interest rates. As of the latest figures:
- S&P 500 Futures: -0.1% at 6,715.25
- Nasdaq 100 Futures: -0.1% at 24,849.50
- Dow Jones Futures: -0.1% at 46,587.0
European markets edge higher
European equities saw modest gains on Friday, led by strength in the financial sector. Major banks, including Santander, BNP Paribas, and Nordea, posted strong performances. The STOXX 50 climbed 0.2% to 5,467, while the STOXX 600 held steady. Aerospace stocks like Airbus and Safran also advanced, offsetting a sharp drop in shipping giant Maersk.
Currency and commodities update
Currency and commodity markets showed restrained movement as traders awaited further policy clarity and responded to geopolitical developments.
Dollar holds firm amid policy uncertainty
The U.S. dollar remained stable on Monday, continuing its rebound following last week’s rate cut. Traders stayed cautious, awaiting more clarity from the upcoming Federal Reserve commentary. The euro edged down slightly by 0.07% to $1.1738.
Oil prices rebound on geopolitical tensions
Crude oil prices rose in early Asian trading, reversing last week’s losses. The uptick was supported by new EU proposals targeting Russian oil exports and Ukrainian strikes on refineries. Supply concerns contributed to the gains:
- Brent Crude: +0.6% to $67.06 per barrel
- WTI Crude: +0.5% to $63.02 per barrel
Noteworthy equity movements
Samsung jumps on AI chip supply deal
Samsung Electronics surged 5% after receiving approval to supply high-bandwidth memory chips (HBM3E) to Nvidia for AI data centers. This puts Samsung in direct competition with SK Hynix and Micron, intensifying the race to dominate AI chip technology. SK Hynix recently completed development of next-generation HBM4 chips.
Oracle and Meta in talks over massive AI cloud deal
Oracle is negotiating a $20 billion multi-year cloud computing contract with Meta, aimed at supporting AI model development. This follows Oracle’s significant $300 billion deal with OpenAI and signals increasing demand for robust cloud infrastructure. Oracle expects OCI revenue to exceed half a trillion dollars, with more multi-billion-dollar deals anticipated.
Apple boosts iPhone 17 production
Apple has reportedly asked suppliers to ramp up production of the base iPhone 17 model by 30–40% following strong pre-order figures. The company is seeing heightened demand for the more affordable $799 model, though this could impact profit margins.
Tesla begins robotaxi trials in Arizona
Tesla received regulatory approval to commence testing of autonomous robotaxi vehicles with safety monitors in Arizona, the state transportation department confirmed. The tests expand on earlier trials in Austin, Texas. While a launch date is yet to be confirmed, the move marks a major step in the company’s self-driving ambitions.
Analyst ratings and forecasts
Meta
William Blair maintains an Outperform rating, citing Meta’s innovations in AI and wearable tech, including four new smart glasses models. The firm forecasts a 25% upside over the next year, although regulatory and privacy challenges persist.
Tesla
Baird upgraded Tesla to Outperform with a revised price target of $548, citing its potential leadership in “physical AI” technologies such as robotaxis, humanoid robots, energy storage, and software. Long-term projections see share prices potentially reaching $1,400 to $3,000 by 2035. Milestones tied to Elon Musk’s compensation plan also support the upside case.
Visa vs Mastercard
Jefferies prefers Visa over Mastercard for 2026, pointing to stronger revenue growth, pricing advantages, and faster growth in value-added services (VAS). Visa is projected to grow over 10% annually, while Mastercard faces challenges including portfolio shifts and currency headwinds. Both companies retain Buy ratings, with price targets of $410 for Visa and $675 for Mastercard.
Kering
Bernstein remains cautious on Kering, maintaining a target of €180 versus the current €260 price. The firm expects continued double-digit organic sales declines in the second half of 2025 and sees limited upside in the near term, despite strategic changes under new CEO Luca De Meo and Gucci’s new creative leadership.
Baidu
Goldman Sachs raised Baidu’s target price from $90 to $154, citing strong growth in AI and cloud services. The firm anticipates 54% of Baidu’s revenue will come from non-search segments by 2027. It also highlighted Baidu’s Apollo Robotaxi business and shareholder-friendly initiatives.
Stellantis
Berenberg upgraded Stellantis to Buy, expecting earnings to rebound in 2026. The company’s modular platform strategy and cost efficiency offer structural advantages despite short-term challenges in Europe. EBIT is projected to rise to €7.1 billion, with net income turning positive.
Dassault Aviation
BofA downgraded Dassault Aviation to Underperform, citing weaker margins from new business jet deliveries and limited defense exposure. Analysts forecast lower EBIT between 2025 and 2028, negative free cash flow in 2026–27, and uncertainties around the FCAS program. Despite a 49% year-to-date gain, analysts see limited further upside.
Key events and data to watch this week
This week, global investors will closely monitor central bank updates, particularly from the Federal Reserve, with several speeches, including Chair Powell’s. Key data releases include:
- U.S. PCE inflation data
- Q2 GDP growth figures
- Durable goods orders
- PMI and new home sales
- Industrial profits from China
- Policy decisions in Switzerland, Sweden, Mexico, and China
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