US Stocks Rise into Weekend – Dow up 1%
US stocks finished higher in trading on Friday, although the gains were not enough to prevent the major indices from closing the week lower as investors continued to digest rising Treasury yields and ongoing geopolitical uncertainty. The Dow Jones gained 0.98% to close at 53,277, while the S&P 500 and Nasdaq both added 0.43%, finishing at 7,674 and 26,180, respectively.
The move higher in equities came despite another rise in US Treasury yields, with stronger services data helping to push yields higher across the curve. The 2-year yield rose 4.8 basis points to 4.236%, while the 10-year yield added 3.0 basis points to 4.734%. The continued rise in longer-dated yields remains an important theme for markets, particularly as traders assess the outlook for inflation and the Federal Reserve’s next move.
The US dollar, however, continued to struggle, with the USD Index edging 0.06% lower to 98.84. The divergence between higher Treasury yields and a softer dollar remains notable and suggests that broader concerns around the US economic and fiscal outlook are continuing to weigh on demand for the greenback.
Oil prices extended their recent gains as geopolitical tensions remained firmly in focus. Brent crude rose 0.65% to $94.39 a barrel, while WTI added 0.26% to $87.06. Traders continue to look for signs of progress towards a resolution in the Middle East, although the lack of meaningful progress so far means the risk premium in oil markets remains elevated.
Gold Continues to Push Higher – Up 6.5% Last Week
Gold was once again one of the strongest performers on Friday, rising 1.91% to $4,603.07 an ounce on the day to lock in a near 6.5% gain over the course of last week. The precious metal continues to benefit from safe-haven demand, with the latest move higher particularly notable given the concurrent rise in Treasury yields. Gold’s ability to continue pushing higher despite the increase in yields, a notable break in the correlation over the last few months, may highlight a change back to its more usual safe-haven status. The world’s favourite precious metal broke through some key resistance levels over the course of last week, taking out a long-term resistance trendline on the daily chart and the 200-day moving average, and for now, it is firmly the bulls in charge. However, there is a long week ahead and volatility looks set to remain high, but trend followers will be looking to establish long positions with support now on the former resistance levels around $4,515 and $4,450.
Geopolitics to Dominate on First Trading Day of the Week
Looking ahead, the economic calendar is relatively quiet today, meaning geopolitical developments are likely to dominate the market narrative. Over the weekend, attention shifted towards the growing trade dispute between the US and Canada, with the US imposing 50% tariffs on Canadian goods and Canada responding with retaliatory measures. The escalation has already resulted in some gapping in the Canadian dollar, and traders will be watching closely for any further developments. However, the Middle East is likely to remain the more important driver for broader market sentiment. The only major event of note on the calendar today is a scheduled update from US Treasury Secretary Scott Bessent towards the end of the session, which could add some volatility again to the bond markets, which is likely to spill across to other products.
Explore all upcoming market events in the Economic Calendar.
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