Stocks Rise as the Dollar and Bonds Take the Spotlight
By the end of the business day on Friday, major indexes were on the up, but investors were also chasing bargains in bonds and the American dollar. The buzz for the week still centers on the latest ISM Purchasing Managers’ Indexes (PMI) and the United States jobs report due Friday.
What’s Happening?
Think of this not as a political story, but a macro‑economic snapshot with a side‑story from the Oval Office. In an odd, somewhat embarrassing scene, President Trump, Vice‑President Mike Pence, and Ukrainian President Zelenskyy got into a heated exchange that made for a memorable press conference for everyone’s cameras. While the chaos didn’t move markets overnight, Russian President Vladimir Putin enjoyed a brief spotlight.
Despite the rising geopolitical tension, the mood across Wall Street stayed surprisingly firm. The S&P 500 and the Nasdaq 100 each shot up over 1 % Friday close. There wasn’t a single clear motive for the rally; it looked more like a “end‑of‑month rebalancing” move rather than fresh buying pressure.
Why the Economy Still Feels Tenuous
After a string of disappointing economic releases, investors are watching the United States economy closely. Trump, who had been expected to step back in the face of negative data, doubled down on policy. The announcement of a 10 % tariff on China last week is a telling sign of that stance.
Meanwhile, Treasury Secretary Janet Bessent has signaled concern about a possible slowdown, describing the economy as “brittle.” Even though she wants a weaker dollar, lower crude prices, and lower Treasury yields, she didn’t mention equities. That could leave the market feeling stuck between soft corporate data and a developmentally aggressive administration.
Upcoming Data and Risks
Key points of the week:
- The ISM manufacturing and services PMI figures.
- Friday’s labor market report.
- Central bank speeches from the BoE, Fed, and others.
If the indices stay solid, market anxiety might ease a bit. A weaker reading could trigger a short‑term correction in equities.
What’s Happening with Bonds and the Dollar?
Across the U.S. Treasury curve, 2‑year yields fell below 4 % and 10‑year yields dipped under 4.2 %. That’s a clear favour for bond buyers. The trick is that the Federal Reserve will likely keep cutting rates, while any “growth scare” would reinforce the bond rally.
For the dollar, the US currency gained its first weekly lift in four weeks. The “dollar smile” shows investors taking a safe‑haven position. Although the U.S. economy may be slowing, it remains the best of a bad bunch for now, because the euro and pound haven’t pushed past their historic support levels.
Gold?
Gold shed some momentum, closing under $2,900 per ounce this week—its worst week of the year. But that drop seems to reflect general cross‑asset friction rather than a fundamental change. Investors can still buy dips, especially since geopolitical tensions keep rumbling.
What’s Coming Next?
The week ahead includes:
- ISM manufacturing PMI in the morning.
- ECB’s expected 25 bp rate cut on Thursday.
- Key speeches from the Bank of England Governor, BoE, and the Fed Chairman.
- Friday’s U.S. jobs report.
- Wednesday’s ISM services PMI.
- Thursday’s earnings release from Broadcom that could spark further interest in AI themes.
Keep your eyes on these data points and central‑bank commentary to gauge whether the market will stay bullish or shift into caution.
