Stocks Receive a Break as US Shutdown Risk Decreases: Market Summary

(Bloomberg) — Global stocks rose Friday as the threat of a US government shutdown receded and expectations grew that China will unveil sweeping measures to boost consumer demand.

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S&P 500 contracts rose 0.8% as a stopgap funding bill looked set to pass in Congress after Senate Democratic leader Chuck Schumer opted not to block the measure. That’s helped lift the mood after the benchmark index extended its three-week rout beyond 10% on Thursday, the technical threshold for a correction. Futures on the Nasdaq 100 gained 1%.

“It looks like the budget bill is still going through despite some opposition from Democrats and this has lifted sentiment in the US and probably there is also some spillover effect to Europe,” Julius Baer & Co. economist Sophie Altermatt said.

“This might be just some reprieve, given we had so many uncertainties with erratic policy moves in the US,” she added.

Europe’s Stoxx 600 index climbed 0.4%, with resources and consumer shares boosted by Beijing’s plan for a news conference Monday to detail steps to boost consumption. The news also lifted the CSI 300 index of mainland China stocks to the highest level this year.

Treasuries gave back some of the gains from the prior session, when investors dashed to haven assets in a move that lifted gold to a record and supported the dollar. Gains for the greenback extended into Friday, strengthening a gauge of the currency for a third day. The pound weakened after data showed the UK economy unexpectedly shrank at the start of 2025.

Avoiding a government shutdown would remove an uncertainty for traders, already fretting over threats to the world economy from President Donald Trump’s tariff war. Two months into Trump’s presidency, sentiment on Wall Street has turned from optimism to nervousness, the equity slump has erased $5 trillion from US stocks, and put the S&P 500 on track for its fourth straight loss-making week.

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The risks have turned investors the most bullish on Treasuries relative to stocks for at least three years, the Bloomberg Markets Live Pulse survey showed. Another haven asset gold held just below the $3000-an-ounce threshold.

However, some strategists reckon the market could be approaching a floor, with Bank of America Corp.’s Michael Hartnett seeing a new bear market as unlikely for Wall Street. “Fresh declines in stock prices will provoke flip in trade and monetary policy,” he wrote.

While the S&P 500 has plunged 10% off its February peak into into correction territory, a bear market is defined as a 20% drop from a recent high. Hartnett recommended buying the S&P 500 at 5,300 points, a 4% drop from current levels.

Among individual stock movers, BMW AG dropped as much as 4.5% in Europe on weak China sales and a threat to US deliveries, while Kering SA plunged as much as 14% after the luxury goods maker surprised investors by naming Demna Gvasalia as Gucci’s new artistic director.

In commodity markets, Brent crude futures rose about 1% as the US tightened sanctions on Russia by restricting payments for energy.

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