The ADP employment report revealed a surprise decline of 32,000 jobs in the private sector, prompting markets to price in an almost 90% probability of a quarter-point cut.
Bond yields eased, with the 10-year Treasury settling near 4.06%, while cyclical sectors such as energy and financials led gains. Small-cap stocks outperformed strongly, with the Russell 2000 advancing more than 1%. Major indices also closed higher:
- Dow Jones: +0.9%
- S&P 500: +0.3%
- Nasdaq: +0.2%
Economic indicators signal resilience
The latest ISM Services PMI climbed to 52.6, marking its highest level since February and signalling a recovery in the services sector. Importantly, the prices component eased, offering some relief on inflation pressures. Employment remained in contraction, while tariffs, slower deliveries and government shutdown pressures persisted.
Global market overview
Here’s how major regions and asset classes performed across global markets.
Asian markets
Asian equities opened mixed, with Japan’s Nikkei up 0.8%, while broader regional shares fell, led by Korea and New Zealand.
European markets
European shares were largely steady, with technology gains offsetting declines in financials. The STOXX 600 rose 0.08%, led by Inditex, which jumped 8.9% on strong winter sales.
Services and composite PMIs signalled Eurozone activity strength, while basic resources and defence stocks also rose. Banks and insurers lagged, and individual movers included Hugo Boss, Airbus and Sainsbury’s.
Currency movements
The US dollar weakened to a five-week low amid growing Fed easing bets. The euro strengthened to $1.1674, its highest since mid-October, supported by strong Eurozone activity. The yen, sterling, Australian, and New Zealand dollars also advanced, reflecting improving global economic signals.
Commodities
Gold and silver extended their recent rally, while oil prices rose modestly in Asian trading. Brent climbed to $62.89 and WTI to $59.23 per barrel, supported by renewed strikes on Russian oil infrastructure and stalled Ukraine peace talks. Gains were partly offset by rising US crude inventories, signalling lingering demand weakness.
Corporate news and market movers
Below are key corporate updates and notable stock movements.
Salesforce
Salesforce reported Q3 adjusted EPS of $3.25, beating estimates, while revenue rose 9% to $10.26 billion. Subscription revenue grew 10% to $9.73 billion. After hours, shares gained 1.8%, having traded as high as 8.5%. The company raised FY26 guidance, expecting adjusted EPS of $11.75–$11.77 and revenue of $41.45–$41.55 billion.
Snowflake
Snowflake forecast Q4 product revenue of $1.19–$1.20 billion, above analyst estimates but below investor expectations, sending shares down 8% after hours. Quarterly revenue reached $1.21 billion.
The company expanded partnerships with Anthropic, Accenture, AWS and Google to enhance AI capabilities amid growing demand for generative AI cloud services.
Other key movers
- Microsoft denied reports that it had reduced AI software sales quotas, reaffirming its 2025 AI ambitions and expectations for monetisation.
- Netflix was among the day’s notable laggards after share sales by co-founder Reed Hastings.
- Five Below advanced after hours following strong performance and comparable sales growth.
- Macy’s reported a surprise quarterly profit and raised annual sales and earnings forecasts, driven by demand at Bloomingdale’s and Bluemercury.
- PayPal shares fell after CFO Jamie Miller warned of slower growth in the branded checkout business for Q4.
- Delta Air Lines expects a $200 million hit to Q4 pre-tax profit due to the recent US government shutdown, but remains optimistic about year-end demand.
Analyst insights and sector outlook
Analysts share their latest sector calls and investment themes. Diversification opportunities beyond technology and communication services remain attractive, with industrials, healthcare and consumer discretionary sectors supported by resilient economic activity.
Notable calls include:
- ASML is named a top semiconductor pick for 2026 by Bank of America, citing a multi-year upturn and robust shareholder returns.
- AMD was highlighted as a “Best Idea 2026” by TD Cowen, driven by AI compute demand and the upcoming Helios platform.
- Oracle initiated with an Overweight rating by Wells Fargo, citing its growing leadership in AI infrastructure and its potential to gain cloud market share.
- UBS upgraded Stellantis to Buy, citing a €3 billion operating income improvement in North America from new products, a more profitable mix and cost cuts. Renault was downgraded due to margin pressures and EV mix challenges, while Michelin was lowered to Neutral amid cyclical headwinds.
- Morgan Stanley upgraded Novartis and Bayer to Overweight, citing attractive valuations and clearer fundamentals into 2026. Price targets were raised to CHF 115 for Novartis and €40 for Bayer.
Additional market themes
- Yardeni Research reaffirmed long-term projections for gold to reach $10,000 an ounce and the S&P 500 to hit 10,000 by 2029, citing persistent central-bank buying and long-term trends. It expects gold to rise to $5,000 by the end of 2026.
- Bank of America reported that its institutional clients accelerated purchases of US shares last week, marking one of the strongest buying weeks since the financial crisis. Tech and Industrials led inflows, while mid-caps saw outflows.
- The Trump administration plans to accelerate robotics development, meeting with industry leaders and considering an executive order next year to strengthen US advanced manufacturing and automation.
Upcoming data and events
Today’s main economic events include:
- US labour data: jobless claims, Challenger job cuts and the four-week average
- September trade figures for exports, imports and balance of trade
- Treasury bill auctions, mortgage rates and Fed updates
- Key US corporate earnings releases: Dollar General, Kroger, Fastenal, Hewlett Packard Enterprise, Ulta Beauty and Samsara
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