A wave of renewed optimism swept through global markets on Monday as progress toward ending the historic US government shutdown helped lift investor sentiment following a volatile period. Comments from President Donald Trump signalled that he is open to supporting a bipartisan Senate agreement that would reopen federal agencies and restore pay for hundreds of thousands of workers, easing one of the key macro uncertainties that has weighed on risk appetite. Technology and growth-linked assets led the recovery, with investors rotating back into sectors that had faced sharp pressure last week as concerns over valuations and weakening confidence intensified. While the deal still requires final approval in both the Senate and the House, the movement towards resolution was enough to stabilise sentiment and encourage a shift back into equities across major regions.

Key Takeaways:

  • Dow Climbs as Shutdown Deal Nears: The Dow Jones Industrial Average gained 381.53 points, or 0.81%, to close at 47,368.63, as renewed optimism over a Senate agreement to end the US government shutdown boosted investor sentiment. 
  • S&P 500 Rebounds 1.5% Led by Tech and Financials: The S&P 500 rose 1.54% to 6,832.43, driven by strong gains in semiconductor, AI infrastructure, and software names. Nvidia and Broadcom led the charge, supported by Microsoft, which climbed 1.9% after snapping an eight-day losing streak. 
  • Nasdaq Jumps as AI Stocks Regain Momentum: The Nasdaq Composite surged 2.27% to 23,527.17, rebounding from its worst weekly drop since April. AI-linked leaders such as Nvidia, Palantir, and AMD all advanced strongly. 
  • Europe Markets Rise on Shutdown Optimism: European equities traded firmly higher, with the Stoxx 600 closing up 1.4% and gains broad across sectors. The FTSE 100 added 1.08%, the CAC 40 rose 1.50%, the DAX gained 1.73%, and Italy’s FTSE MIB outperformed with a 2.29% surge. Technology and banks led regional performance, with the Stoxx 600 Technology Index finishing up 1.6%, and banking shares hitting a new 52-week high. Corporate moves were also in focus, with Diageo climbing more than 5% after appointing a new CEO. Meanwhile, Greece’s inflation nudged upward, and Portugal reported an improvement in its trade deficit.
  • Asia-Pacific Markets Rebound Strongly After AI Selloff: Asian stocks advanced broadly as investors looked past last week’s valuation-driven declines. South Korea’s Kospi led regional gains, jumping 3.02% to 4,073.24, driven by sharp rebounds in Samsung Electronics, SK Hynix, and GS Holdings. Japan’s Nikkei 225 gained 1.26% to 50,911.76 after Bank of Japan minutes hinted at a possible rate hike, while Hong Kong’s Hang Seng rose 1.54% and China’s CSI 300 added 0.17% following better-than-expected inflation data. India’s Sensex and Nifty rose over 0.5% each, supported by falling unemployment and strong rural job growth.
  • Oil Prices Edge Higher on Shutdown Hopes: Crude futures gained as optimism about a resolution to the US government shutdown lifted demand outlooks. Brent crude rose 0.69% to $64.07 a barrel, while WTI advanced 0.67% to $60.16. Gains were capped by concerns over rising inventories and increased OPEC+ output in December, though traders viewed the pause in further supply hikes as supportive near-term.
  • Treasury Yields Rise on Improved Risk Sentiment: The 10-year Treasury yield climbed more than 2 basis points to 4.116%, while the 2-year yield rose 3 basis points to 3.591% as investors priced in a potential end to the shutdown. The 30-year yield edged slightly higher to 4.706%. 

FX Today:

  • EUR/USD Slips, Pressures Early-October Lows: EUR/USD closed at 1.1563, down 0.03%, after moving between 1.1593 and 1.1541. The pair continues to trade below the 50-day and 100-day SMAs at 1.1665, highlighting sustained short-term downside pressure. While the broader structure remains supported by the rising 200-day SMA at 1.1351, recent sessions have been dominated by selling interest. The pair is now approaching prior swing lows from early October, where initial support could emerge. Resistance sits at the session high of 1.1593 before the 1.1665 region. If price holds above 1.1541, consolidation may follow; however, a break lower would likely target the 1.1500 psychological level and potentially deeper retracement levels.
  • GBP/USD Holds Firmer But Stays Under Major Averages: GBP/USD closed at 1.3182, up 0.14%, after trading between 1.3191 and 1.3136. Despite a modest intraday rebound, price remains below the 50-day SMA at 1.3387, the 100-day SMA at 1.3442, and the 200-day SMA at 1.3288. The recent break beneath the 200-day SMA confirms a bearish shift in the medium-term trend, with lower highs and lower lows increasingly well-defined. Resistance is seen at 1.3191 and then the 200-day SMA at 1.3288. Support lies at 1.3136, with a break lower exposing the 1.3000 region. A sustained move back above 1.3288 would ease bearish momentum.
  • USD/JPY Extends Advance Toward Fresh Cycle Highs: USD/JPY closed at 154.04, up 0.41%, after trading between 154.24 and 153.39. The pair continues to push higher above the 50-day SMA at 150.22, the 100-day SMA at 148.61, and the 200-day SMA at 147.69, all of which slope upwards. The broader trend remains firmly bullish, supported by persistent higher highs and strong momentum. Immediate resistance is seen near 154.24 with scope for an extension towards 155.00. Initial support rests at 153.39, followed by the 50-day SMA if a deeper pullback occurs. As long as price holds above 153.39, buyers retain control.
  • AUD/USD Rebounds, Tests Layered Resistance: AUD/USD closed at 0.6538, up 0.71%, trading between 0.6540 and 0.6489. The pair staged a strong recovery, closing above the 100-day SMA at 0.6538 while still sitting below the 50-day SMA at 0.6558. The rising 200-day SMA at 0.6449 continues to underpin the broader medium-term structure. Immediate resistance appears at 0.6540 and 0.6558, with 0.6600 marking the next upside target if momentum continues. Support is located at 0.6489 and the 200-day SMA. A sustained close above 0.6538 would reinforce the improving short-term tone.
  • Gold Jumps as Uptrend Reasserts Above 50-Day: Gold closed at $4111, up 2.77%, after trading between $4115 and $3998. The metal posted a strong bullish session, rebounding decisively from support near the 50-day SMA at $3890. Gold remains well above the 100-day SMA at $3620 and the 200-day SMA at $3370, sustaining a robust medium-term uptrend. Immediate resistance sits near $4115, with the prior all-time high around $4400 the next key level. Support lies at $3998, with the rising 50-day SMA providing deeper trend support. Holding above $3998 maintains the bullish structure.
  • Silver Rebounds Strongly, Uptrend Intact: Silver closed at $50.51, up 4.53%, trading between $50.55 and $48.91. The metal has now moved towards its seventh consecutive monthly gain, supported by strength above the 50-day SMA at $46.48 and the 100-day SMA at $42.07. The rebound from the $48.00 area reinforces this region as near-term support. Immediate resistance lies at $50.55, followed by the $54.00–$55.00 area, where previous highs were set. A break below $48.91 would signal renewed corrective pressure, while holding above keeps the broader bullish trend intact.

Market Movers:

  • AI and Semiconductor Stocks Lead Market Gains: Palantir rose more than 9% to top the S&P 500 and Nasdaq 100, while Micron and Western Digital gained over 6% as investors rotated back into AI-linked infrastructure names following last week’s selloff.
  • Megacap Tech Rebounds, Supporting Broader Sentiment: Nvidia climbed over 5%, Tesla and Alphabet gained more than 3%, while Amazon, Meta and Microsoft advanced over 1%, helping stabilise the Nasdaq after its steep weekly decline. Apple also edged higher by 0.36%.
  • Gold Miners Rally as Bullion Breaks Higher: Anglogold Ashanti, Barrick, Gold Fields and Newmont each gained more than 5%, driven by the strong rebound in gold prices as the metal posted a near 3% daily rise.
  • TreeHouse Foods Surges on Acquisition Deal: TreeHouse Foods jumped more than 22% after Investindustrial agreed to acquire the company for roughly $2.9 billion.
  • Albemarle Advances on Upgraded Price Target: Albemarle closed more than 6% higher after Scotiabank raised its price target to $85 from $70, citing improving lithium market dynamics.
  • Celestica Gains on Upgrade to Buy: Celestica rose more than 6% after Citigroup upgraded the stock to buy from neutral and assigned a price target of $375.
  • Metsera Declines as Bidding Interest Drops: Metsera fell more than 15% after Novo Nordisk declined to raise its acquisition offer, effectively ending the bidding contest with Pfizer.
  • Monday.com Slides on Weaker Revenue Outlook: Monday.com dropped more than 12% after issuing fourth-quarter revenue guidance of $328–$330 million, below market expectations.
  • Applied Optoelectronics Falls Following Downgrade: Applied Optoelectronics declined more than 11% after B. Riley Securities cut its rating to sell from neutral with a $15 price target.
  • Ball Corporation Drops on Leadership Change: Ball Corp fell over 5% after its CEO stepped down with immediate effect, prompting concerns over leadership continuity.

Markets began the week on stronger footing as progress toward ending the US government shutdown eased a key source of uncertainty that has weighed on sentiment in recent sessions. The rebound in technology, AI-linked names and cyclicals signalled a renewed appetite for risk, though investors remain attentive to the final stages of legislative approval and the resumption of key economic data releases. While the potential resolution has lifted near-term confidence, the coming days will be defined by whether lawmakers can deliver a swift conclusion and whether the improvement in sentiment proves durable as markets move deeper into year-end positioning.