Markets Advance as US Manufacturing Rebounds Sharply

Markets Rally on Strong US Manufacturing Data

Global equity markets started the week on a positive note, with major indices in the United States and Europe posting gains. The rally was supported by a significant rebound in U.S. manufacturing activity, which expanded in January for the first time in a year, according to the latest ISM survey. This unexpected strength adds a new variable to interest rate outlooks.

Sector Performance and Commodity Movements

The S&P 500 closed higher, driven by technology and AI-related stocks like Alphabet and Amazon ahead of their earnings reports. European markets followed, with the STOXX 600 reaching a new record high. In commodities, gold experienced a substantial surge of over 5%, while oil prices declined amid easing geopolitical tensions between the U.S. and Iran.

Economic Data Delays and Trade News

Investors face delays for key economic indicators, including the JOLTS job openings and the January employment report, due to a partial U.S. government shutdown. Meanwhile, a new trade agreement between the U.S. and India was announced, which will see India cease Russian oil purchases in exchange for reduced U.S. tariffs on its goods.

Market Outlook

Attention now turns to upcoming corporate earnings from major companies like AMD and Pfizer. The market will also closely monitor developments regarding the U.S. government shutdown, as its resolution is necessary for the release of crucial economic data.

FAQ

Q: Why did U.S. stock markets rise despite economic uncertainties?
A: The markets were lifted by strong performance in the technology sector and a robust ISM manufacturing report, which signaled economic expansion and boosted investor confidence.

Q: Which key economic reports are delayed?
A: The JOLTS job openings data and the monthly employment report are postponed until U.S. government funding is restored.

Source: Investing.com