On Friday, the Dow Jones (US30) rose by 0.37% (ending the week up +1.02%). The S&P 500 (US500) gained 0.49% (ending the week up +0.92%), and the Nasdaq (US100) technology Index closed 0.70% higher (ending the week up +1.85%). The US stocks closed at new highs on Friday, continuing a record-breaking streak. Investors were buoyed by positive corporate results, the Federal Reserve’s first rate cut of 2025, and signs of progress in US-China relations. FedEx jumped 2.3% after reporting stronger-than-expected results, while Apple rose by 3.2% following a price target upgrade from J.P. Morgan and the launch of a new iPhone. Tesla shares climbed 2.2% after Baird upgraded its rating to “outperform,” which helped lift the technology and consumer discretionary sectors. Markets also monitored a lengthy conversation between President Trump and Chinese leader Xi Jinping, in which Trump noted progress.
The Canadian dollar strengthened to 1.375 per US dollar, nearing its September highs. Preliminary estimates show that retail sales rose by about 1.0% in August, reversing July’s 0.8% decline. This points to stronger household demand than markets had feared, which lowered the probability of a sharp policy easing by the Bank of Canada. The Bank of Canada recently cut its policy rate by 25 basis points to 2.5% after a sharper-than-expected economic slowdown, including a 1.6% contraction in Q2 GDP and a 27% collapse in exports. The deteriorating labor market, with a net job loss and an unemployment rate of 7.1% in August, has eased wage pressures and supported the case for policy easing.
European stock markets were mixed on Friday. The German DAX (DE40) fell by 0.15% (down -0.61% for the week), while the French CAC 40 (FR40) closed down 0.01% (up +0.07% for the week). The Spanish IBEX35 (ES35) rose by 0.56% (down -0.65% for the week), and the British FTSE 100 (UK100) closed down 0.12% (down -0.72% for the week).
On Monday, silver prices surged to $43.5 per ounce, reaching a new 14-year high as expectations of further rate cuts from the US Federal Reserve supported demand for precious metals. Strong fundamentals have bolstered silver, with limited supply helping to maintain its upward momentum. On the demand side, robust consumption in the solar energy, electric vehicle, and electronics sectors provided additional support.
WTI crude oil prices fell by 1.4% on Friday to $62.70 per barrel, marking the third consecutive session of losses. A supply surplus and concerns about weakening demand outweighed hopes that the recent US Fed rate cut would boost consumption. Traders also monitored developments in US-China and US-India relations, which could affect Russian oil flows, along with a strengthening dollar that reduced demand for dollar-denominated commodities.
The US natural gas prices dropped to $2.90/MMBtu, their lowest in three weeks, thanks to ample gas in storage and expectations for milder weather, which will reduce near-term demand. Record production earlier this year allowed for more gas than usual to be put into storage, and supplies are currently about 6% above average. On Thursday, the EIA reported a 90 billion cubic foot storage build for the week ending September 12, exceeding last year’s 56 billion cubic feet and the five-year average of 74 billion cubic feet, as mild temperatures limited heating and cooling demand.
Asian markets had a mixed performance last week. Japan’s Nikkei 225 (JP225) rose by 0.54%, China’s FTSE China A50 (CHA50) fell by 1.46%, Hong Kong’s Hang Seng (HK50) added 0.90%, and Australia’s ASX 200 (AU200) ended the week down 0.54%.
The People’s Bank of China (PBoC) kept its one- and five-year Loan Prime Rates at 3% and 3.5%, respectively, for the fourth straight month, despite the recent US Fed rate cuts. Authorities are holding back on major stimulus measures even as economic data points to a slowdown. Meanwhile, US President Donald Trump stated that he and Xi Jinping had approved a TikTok deal during a “productive” phone call, although Beijing has not confirmed this information.
The Reserve Bank of Australia (RBA) is continuing to closely monitor economic developments, though recent data is broadly in line with expectations, according to Governor Michele Bullock on Monday. Speaking to lawmakers, Bullock noted that the Central Bank is nearing its inflation and employment goals, with inflation on track to reach the 2-3% range and the labor market close to full employment. The board has gradually eased policy, cutting rates in February, May, and August to 3.6%, with further action depending on incoming data.
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