Robinhood, Applovin jump as S&P 500 reshuffle boosts index entrants
Markets opened Friday on a calmer note after a turbulent start to the month, as investors positioned for crucial U.S. nonfarm payroll data that could confirm expectations of a September Federal Reserve rate cut.
Equity Markets Show Tentative Optimism
U.S. stock futures were modestly higher, extending Thursday’s rally that pushed the S&P 500 to a fresh record. Futures gains were modest, signaling that traders are waiting for confirmation that the Fed has enough evidence to lower rates.
In Asia, indexes rebounded sharply, with Japan’s Nikkei up 1.0% after Washington cut tariffs on Japanese cars and parts to 15%, boosting automakers and financial stocks. Chinese equities recouped most of Thursday’s losses, reflecting bargain-hunting, while South Korea’s Kospi added 0.1% after recent strength.
European stocks mirrored this cautious optimism, with the Stoxx 600 inching up 0.1%. However, France’s CAC 40 underperformed, down 0.2%, as concerns about political stability and Fitch’s upcoming review weighed on sentiment.
Region |
Index Move (Friday) |
Key Drivers |
U.S. Futures |
S&P +0.1%, Dow flat |
Rate-cut bets, NFP anticipation |
Japan |
Nikkei +1.0% |
Tariff relief for automakers |
China |
Shanghai +0.5% est. |
Bargain hunting, policy hopes |
Europe |
Stoxx 600 +0.1% |
Mixed; France political uncertainty |
Bond Yields Signal Market Caution
Treasury yields fell across the curve, with the 2-year at 3.58% and the 10-year at 4.15%, as markets priced in a slower labor market and potential rate easing. Gilts and eurozone bonds followed suit, supported by subdued inflation expectations and risk aversion.
The bond market’s reaction underscores investor preference for safety ahead of a potentially market-moving jobs report. Traders are betting on further steepening of the yield curve if the Fed delivers aggressive cuts, with swaps markets implying nearly 50 basis points of easing this year.
Dollar Softens While Gold Pauses
The DXY dollar index slipped 0.2% to 98.11, reflecting a cautious tone ahead of the jobs data. A softer dollar has supported emerging market currencies and metals.
Gold prices edged higher but remain near record levels of $3,640/oz reached earlier in the week, as traders locked in profits. Market uncertainty and expectations for rate cuts continue to provide a strong floor for gold, with analysts watching $3,600 as a key resistance level.
Asset |
Price |
Weekly Trend |
DXY Dollar Index |
98.11 (-0.2%) |
Lower ahead of NFP |
Gold Futures |
$3,598.70 (-1%) |
+4% on week |
Brent Crude |
$66.67 (-0.5%) |
-1% on week |
Oil Extends Losses as OPEC+ Meeting Looms
Crude prices fell for a second straight session on reports that OPEC+ may consider boosting output in October, countering market expectations of supply restraint. Brent and WTI are both down over 1% on the week.
The upcoming OPEC+ policy meeting on Sunday is now a critical catalyst. Any decision to release additional barrels could exacerbate concerns of a supply glut, particularly as U.S. stockpiles unexpectedly rose this week.
Market Outlook
Investors enter the weekend bracing for significant catalysts:
- Nonfarm Payrolls: A print in line with expectations (75,000 jobs added) would confirm slowing momentum, supporting Fed rate-cut bets.
- Fed Policy Path: Markets see September as the likely pivot point, with rate futures pricing in 50bps of easing this year.
- Oil Market Volatility: OPEC+’s decision will be pivotal for energy stocks and inflation expectations.
- Europe’s Political Risk: France’s looming confidence vote and potential downgrade add another layer of uncertainty.