Weekly Capital Market Watch

US equities ended a volatile, holiday-shortened week higher, supported by tentative signs of easing Middle East tensions. The Nasdaq led gains with its strongest week since November, while the S&P 500 (+3.36%) and Dow (+2.96%) also advanced. Markets rebounded midweek on signals that the US may reduce military involvement in Iran, though uncertainty persisted. Oil price spikes briefly weighed on sentiment, but indexes recovered by week’s end. Smaller-cap stocks also posted solid gains.

US Treasuries rallied, with the 10-year yield falling from 4.44% to ~4.31%, supported by comments from Fed Chair Jerome Powell that eased inflation concerns. Economic data was mixed: job growth remained modest (ADP: +62k), jobless claims improved, but continuing claims rose. Labor demand weakened, with job openings declining and hiring at its lowest since 2020. Consumer confidence edged up to 91.8, while manufacturing expanded for a third month (PMI 52.7), though employment continued to contract and price pressures increased.

European equities followed global sentiment higher. The STOXX Europe 600 rose 3.92%, driven by optimism that geopolitical risks may ease. Major indexes also posted gains: Germany’s DAX +3.89%, Italy’s FTSE MIB +5.18%, France’s CAC 40 +3.48%, and the UK’s FTSE 100 +4.70%.