(Bloomberg) — Global stocks rose as the threat of a US government shutdown receded, removing at least one element of uncertainty confronting investors. Gold hit a record above $3,000 an ounce amid haven demand.
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S&P 500 contracts rose 0.9% as a stopgap funding bill looked set to pass in Congress after Senate Democratic leader Chuck Schumer opted not to block the measure. That’s helped lift the mood after the benchmark index extended its three-week rout beyond 10% on Thursday, the technical threshold for a correction. Futures on the Nasdaq 100 advanced 1.2% with Nvidia Corp. leading premarket gains among the Magnificent Seven tech cohort.
“It looks like the budget bill is still going through despite some opposition from Democrats and this has lifted sentiment in the US and probably there is also some spillover effect to Europe,” Julius Baer & Co. economist Sophie Altermatt said.
“This might be just some reprieve, given we had so many uncertainties with erratic policy moves in the US,” she added.
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Avoiding a government shutdown would remove a concern for traders, already fretting over threats to the world economy from President Donald Trump’s tariff war. Two months into Trump’s presidency, $5 trillion has been erased from US stocks.
Those risks are spurring demand for haven assets, with investors the most bullish on Treasuries relative to stocks for at least three years, according to Bloomberg Markets Live Pulse survey. It’s also pushed gold to successive record highs, with the yellow metal now up more than 14% year-to-date.
“Gold is in a secular bull market,” said Peter Kinsella, head of foreign exchange strategy at Union Bancaire Privee UBp SA, who expects prices to reach $3,300 an ounce by year end. “For sure, that’s down to uncertainty caused by US trade policies but central bank demand is also a big factor.”
Some strategists reckon relief could be on the horizon for risk assets after the recent selloff. While the S&P 500 has plunged 10% off its February peak into correction territory, Bank of America Corp.’s Michael Hartnett said there’s unlikely to be a slide into a new bear market. That’s defined as a 20% drop from a recent high.
2025-03-14 11:46:00
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