Stocks Rise Before Trump-Harris Debate, Inflation: Markets Wrap

(Bloomberg) — Stocks extended their rebound after last week’s selloff, with traders gearing up for the US Presidential debate and a key inflation reading.

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The S&P 500 got close to reclaiming its 5,500 mark. Tesla Inc. rallied after Deutsche Bank AG named Elon Musk’s electric-vehicle giant its top pick. Oracle Corp. jumped 13% to an all-time high after solid results signaled that artificial-intelligence demand continues to boost its cloud computing business. Treasuries wavered ahead of a $58 billion sale of three-year notes.

“If demand for the notes is weak, it could spark hawkish money flows while an auction outcome too-strong could reignite recession worries,” said Tom Essaye at The Sevens Report. “More ‘wait-and-see trading’ is most likely for today’s session as traders await the latest inflation data — which has the potential to shift Federal Reserve policy expectations ahead of next week’s meeting.”

Traders will also be weighing election risks ahead of the first debate between former President Donald Trump and Vice President Kamala Harris. The match-up promises more clarity for investors who’ve already spent months parsing campaign-trail language around tax proposals, tariff projections, government spending plans and policies on energy, electric vehicles, health care and more.

The S&P 500 rose 0.4%. The Nasdaq 100 rose 0.5%. The Dow Jones Industrial Average fell 0.2%. A Bloomberg gauge of the “Magnificent Seven” megacaps climbed 1.4%. The Russell 2000 of small firms was little changed.

Treasury 10-year yields were little changed at 3.70%. The dollar edged up. Oil slipped to near the lowest since 2021.

US equities are unlikely to slump 20% or more as the risk of a recession remains low against expected interest-rate cuts from the Fed, according to Goldman Sachs Group Inc. strategists.

The team led by Christian Mueller-Glissmann said while stocks could decline into the year end — hurt by higher valuations, a mixed growth outlook and policy uncertainty — the odds of an outright bear market are slim as the economy is also in part being supported by a “healthy private sector.”

Corporate Highlights:

• Apple Inc. lost its court fight over a €13 billion ($14.4 billion) Irish tax bill and Google lost its challenge over a €2.4 billion fine for abusing its market power, in a double boost to the European Union’s crackdown on Big Tech.

• JPMorgan Chase & Co. is leading a historic retreat from preferred shares as Wall Street lenders re-jig their balance sheets ahead of new rules that are set to be significantly watered down.

• Southwest Airlines Co. Chairman Gary Kelly is stepping down along with six directors, a dramatic move after the carrier faced calls for a strategic overhaul from activist investor Elliott Investment Management.

• BMW AG warned that a recall affecting some 1.5 million vehicles due to faults with their Continental AG braking systems will cut its profit this year, adding to the industrial crisis in Europe’s largest economy.

Story continues

Key events this week:

• US CPI, Wednesday

• Japan PPI, Thursday

• ECB rate decision, Thursday

• US initial jobless claims, PPI, Thursday

• Eurozone industrial production, Friday

• Japan industrial production, Friday

• U. Michigan consumer sentiment, Friday

Some of the main moves in markets:

Stocks

• The S&P 500 rose 0.4% as of 9:48 a.m. New York time

• The Nasdaq 100 rose 0.5%

• The Dow Jones Industrial Average fell 0.2%

• The Stoxx Europe 600 fell 0.4%

• The MSCI World Index rose 0.1%

• Bloomberg Magnificent 7 Total Return Index rose 1.4%

• The Russell 2000 Index was little changed

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro was little changed at $1.1028

• The British pound was little changed at $1.3063

• The Japanese yen rose 0.1% to 143.02 per dollar

Cryptocurrencies

• Bitcoin fell 0.5% to $56,756.69

• Ether fell 0.3% to $2,333.84

Bonds

• The yield on 10-year Treasuries was little changed at 3.70%

• Germany’s 10-year yield advanced one basis point to 2.18%

• Britain’s 10-year yield was little changed at 3.86%

Commodities

• West Texas Intermediate crude fell 0.9% to $68.10 a barrel

• Spot gold rose 0.1% to $2,508.99 an ounce

This story was produced with the assistance of Bloomberg Automation.

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