Global equities experienced a modest uptick on Friday, with the MSCI world stock index advancing slightly as U.S. Treasury yields edged lower. Concurrently, the Japanese yen rallied against the U.S. dollar amid market speculation that Japanese financial authorities are preparing to intervene in currency markets to stabilize the yen.
The yen's sudden reversal from losses to gains against the dollar suggested to market participants that Japan might have conducted rate consultations with financial institutions, a move often interpreted as a preparatory signal for intervention. Earlier the same day, the Bank of Japan reiterated its commitment to maintaining low borrowing costs despite political sensitivities ahead of an imminent snap election.
After two days of gains, U.S. equities on Wall Street showed limited progress by midday, indicating a period of consolidation following a week characterized by sharp market movements. Earlier volatility had been influenced by a sell-off and subsequent rebound related to U.S. President Donald Trump’s retreat from tariff escalations and dismissing military action over Greenland.
Looking ahead to a busy week featuring the Federal Reserve's monetary policy meeting, significant economic reports, and major corporate earnings announcements, investors appeared to adopt a cautious stance. Gene Goldman, Chief Investment Officer at Cetera Investment Management in California, noted that the market was in a 'wait-and-see approach,' factoring in the absence of new major catalysts on the day and the relief from recent geopolitical uncertainties.
Market expectations, as reflected in Fed funds futures, indicated a 97% probability of the Federal Reserve maintaining interest rates at current levels during the upcoming meeting, according to the CME Group’s FedWatch tool.
Adding to earnings anticipation, investors digested disappointing earnings guidance from Intel following its recent quarterly report, while awaiting results from key companies including Microsoft, Meta Platforms, and industrial heavyweight Caterpillar over the coming week.
Despite global stocks recovering much of the losses from midweek's sharp sell-off, concerns persist regarding ongoing negotiations between U.S. and European leaders over matters related to Greenland. Consequently, large investors from Northern Europe are approaching holdings of U.S. assets with increasing caution.
Furthermore, the market remains attentive to developments in U.S.-brokered trilateral discussions concerning the conflict in Ukraine. Ukrainian President Volodymyr Zelenskiy indicated that crucial discussions about territorial issues would take place over the weekend in Abu Dhabi.
Market performance in U.S. stock indexes at 11:33 a.m. Eastern Time showed the Dow Jones Industrial Average falling 286.46 points (-0.57%) to 49,100.07, while the S&P 500 inched up by 5.37 points (+0.08%) to 6,918.72. The Nasdaq Composite advanced 99.59 points (+0.43%) to 23,535.61. The MSCI global equity index increased by 1.93 points (+0.19%) to 1,037.96, whereas Europe's STOXX 600 index dipped 0.21%.
Currency markets experienced volatility with the yen's brisk appreciation earlier in the session amid intervention speculation. The U.S. dollar index, which measures the greenback against a basket of currencies including the euro and yen, declined 0.25% to 98.06, positioning it for its largest weekly loss since June.
The euro gained 0.1% to $1.1766 while the dollar weakened by 0.47% against the yen to 157.65. Sterling strengthened 0.59% reaching $1.3577. Japanese Finance Minister Satsuki Katayama remarked that authorities were monitoring the currency markets closely but refrained from commenting specifically on intervention rumors.
U.S. Treasury yields saw slight declines, with the 10-year note yield down 0.6 basis points to 4.245%, and the 30-year bond yield also falling 0.6 basis points to 4.8427%. The 2-year note yield, typically sensitive to Federal Reserve rate expectations, decreased by 1.2 basis points to 3.603%.
Commodities markets showed renewed strength, particularly in energy and precious metals. Oil prices climbed amid escalating geopolitical tensions with Iran, accompanied by concerns over supply disruptions from Kazakhstan. U.S. crude futures increased 2.81% to $61.03 a barrel, while Brent crude rose 2.75% to $65.82 a barrel.
Safe-haven demand supported sharp advances in precious metals, with silver surpassing the $100-per-ounce mark for the first time and gold setting fresh records aiming toward the $5,000 level as investors sought refuge from ongoing global uncertainties. Spot gold prices increased 0.94% to $4,983.11 an ounce, and U.S. gold futures gained 0.55% at $4,936.00 an ounce.
Among other metals, copper prices climbed 3.08% to $13,148.50 per tonne, and three-month aluminum contracts on the London Metal Exchange rose 1.1% to $3,167.50 per tonne.