New york: Global markets rose on Thursday after US private sector hiring and services activity exceeded expectations, even amid an ongoing federal government shutdown that continues to impact the availability of key economic data.
According to Anadolu Agency, US private sector employment increased by 42,000 in October, surpassing forecasts and alleviating concerns about a weakening labor market. Additionally, the Institute for Supply Management services Purchasing Managers Index for October climbed to 52.4, which was also above estimates, signaling continued economic expansion.
Money market pricing saw the probability of a Federal Reserve rate cut decrease to 62% as the labor market displayed signs of moderation. Meanwhile, the US Supreme Court is reviewing President Donald Trump's tariffs to ascertain whether he exceeded his emergency powers under the International Emergency Economic Powers Act. US Solicitor General John Sauer argued the act was instrumental in securing significant agreements with countries like China, while Neal Katyal, representing the challengers, contended that Trump bypassed Congress to impose the tariffs. A decision is anticipated soon as Treasury Secretary Scott Bessent expects a ruling in favor of Trump.
In a separate development, Transportation Secretary Sean Duffy announced a 10% reduction in capacity at approximately 40 airports starting Friday to alleviate pressure on air traffic controllers working without pay during the ongoing shutdown.
On Wall Street, the S and P 500 rose 0.37%, the Nasdaq 0.65%, and the Dow Jones Industrial Average 0.48% on Wednesday, before opening mixed on Thursday. The US 10-year Treasury yield increased to 4.16% on Wednesday amid tariff discussions and stabilized at 4.15% on Thursday. The US Dollar Index ended Wednesday at 100.2, trading 0.2% lower at 100 on Thursday.
In Europe, investors concentrated on the Bank of England's monetary policy meeting. With September inflation at 3.8%, surpassing the 2% medium-term target, the bank is anticipated to maintain its policy rate at 4% and defer cuts until February 2026. Budget planning discussions are ongoing across the continent, with France experiencing disputes and drone sightings at military facilities broadening. A suspicious device was detected near a base in Leuven's Heverlee district, following initial drone activity at Belgium's Elsenborn camp on Oct. 3. Investigations are underway after similar occurrences in Poland, Romania, Estonia, and Denmark.
The FTSE 100 rose 0.64%, the FTSE MIB 30 0.41%, the CAC 40 0.08%, and the DAX 40 0.42% on Wednesday, they also opened higher on Thursday.
Asian markets also advanced as improved risk appetite in the US bolstered regional sentiment. While Asian indexes had fallen earlier in the week due to concerns over US tech stock valuations, they rebounded strongly. Toyota Motor reported a 7% decrease in net profit for April to September compared with a year earlier, totaling $11.5 billion, but projected an operating profit of $22.6 billion for the fiscal year ending in March. Consequently, Toyota shares rose 4.5% near the close of trading on the Nikkei 225. Japan's services PMI came in at 53.1, exceeding expectations, and its composite PMI increased to 51.5.
The Nikkei 225 gained 1.5%, the Kospi Index 1.6%, the Hang Seng Index 1.65%, and the Shanghai Composite Index 0.9%.