A rebound in technology shares drove stocks higher as a slate of upbeat earnings and optimism that the US government shutdown is nearing an end lifted sentiment.
Nasdaq 100 futures climbed 0.6% as Nvidia Corp. led gains across the Magnificent Seven in premarket trading. Advanced Micro Devices Inc. jumped more than 5% after forecasting faster sales, while Nvidia partner Hon Hai Precision Industry Co. and Europe’s Infineon Technologies AG offered rosy forecasts.
Contracts on the S&P 500 rose 0.3%, pointing to extended gains after investors shunned tech in favor of defensives on Tuesday. Treasuries rallied, catching up with the prior session’s advance in futures after the cash market was shut for Veterans Day. The dollar edged higher and gold was little changed.
Markets are anticipating an end to the 43-day US government shutdown, with House members set to return to Washington to vote on a spending deal. Traders are betting that the resumption of data releases could bolster the case for interest-rate cuts amid lingering uncertainty over policymakers’ next move.
“What I see is a wind of optimism and momentum in the US,” said Roland Kaloyan, head of European equity strategy at Societe Generale SA. “Markets are currently buying 2026 amid a positive cocktail of resilient growth, AI investments, Fed cuts and a weaker dollar.”
The resolution of the last four US shutdowns has typically lifted the S&P 500 and most of its sectors, based on median performance. Stocks gained after every shutdown since 1995, except early 2018, with consumer shares leading.
Given this week’s 1.8% advance on signs of a deal, markets may have already priced in some of the usual post-shutdown bounce.
“The message is that we are about to get more liquidity coming into financial markets at a time when the economy isn’t doing too badly,” said Justin Onuekwusi, chief investment officer at St. James’s Place in London.
UK gilts and the pound fell after the government was plunged into fresh turmoil amid allegations that Wes Streeting, a senior member of Keir Starmer’s cabinet, was plotting to oust the prime minister. The feud has spilled into the open just weeks before a budget in which the government is expected to raise income tax.
“The pound remains unloved,” wrote Kathleen Brooks, research director at XTB. “Budget concerns, growth issues and now political woes are a toxic mix for FX investors.”
With the S&P 500 set for a fourth straight day of gains after fears over lofty valuations and the sustainability of the AI-fueled rally spooked investors last week, some strategists still caution that US stocks remain expensive.
Peter Oppenheimer and his team at Goldman Sachs Group Inc. expect the US benchmark to achieve annual returns of 6.5% in the coming 10 years, lagging all other regions.
“Diversify beyond the US, with a tilt toward emerging markets,” the team wrote in a note. “We expect higher nominal GDP growth and structural reforms to favor EM, while AI’s long-term benefits should be broad-based rather than confined to US technology.”
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
