Global markets opened the week on a strong note, climbing higher on Sunday night as investors moved into Wall Street’s second week of third-quarter earnings.

Futures across major U.S. indexes pointed up, with the Dow Jones Industrial Average gaining 84 points, or 0.2%, while the S&P 500 rose 0.2%, and the Nasdaq 100 advanced 0.3%, according to data from CNBC. Traders were watching for key inflation data and several high-profile earnings set for release later in the week.

President Donald Trump helped calm sentiment after reports confirmed he had recently exempted dozens of products from his reciprocal tariffs and was considering removing duties on hundreds more. Trump told reporters last week that his proposed 100% tariff on Chinese goods “would not be sustainable.”

There is reportedly a growing agreement within the Trump administration that certain non-U.S.-produced items should face lower import costs. The comment helped offset some of last week’s tension that had rattled investors after new tariff threats reignited trade worries.

Europe rebounds as banking stocks lead market recovery

European markets joined the rally Monday morning after a volatile few days dominated by U.S. banking fears. The pan-European Stoxx 60 climbed 0.8% at 8:30 a.m. in London, reversing Friday’s 0.95% drop.

The FTSE 100 in the U.K. rose 0.5%, Germany’s DAX added 1.1%, France’s CAC 40 gained 0.7%, and Italy’s FTSE MIB advanced 1.43%. The Stoxx Europe 600 Banks Index also surged 1.6%, driven by Banco Sabadell, up 4.4%, and BPER Banca, which climbed 4%.

Investors across the Atlantic were weighing improving risk appetite with persistent credit jitters tied to Wall Street’s loan portfolios. The positive tone in Europe helped steady global sentiment heading into a heavy data week.

In the bond space, U.S. Treasury yields kept sliding as demand for safer assets rose. The two-year yield dropped below 3.4%, its lowest level since 2022, while the 10-year yield briefly touched 3.93% on Friday before rebounding to 4%.

That was just the third time since April the benchmark yield slipped under 4%. The sharp drop reflected a mix of concerns; trade uncertainty, weaker jobs data, and high stock valuations. Many investors locked in 10-year yields as a defensive play against possible market pullbacks.

The Bloomberg Treasury Index is now up 6.6% this year through Thursday, marking its best stretch since 2020. Traders used options to protect against another dip below 4%, which could accelerate gains if hedging activity spikes.

Matthew Hornbach, who leads rate strategy at Morgan Stanley, said investors should “bid a fond farewell to 10-year Treasury yields above 4%,” noting that a prolonged government shutdown could extend the rally in bonds.

Gold surges, silver steadies, and rate cuts stay in focus

Commodity markets stayed active as traders balanced metal demand with changing rate expectations. Spot gold surged by 0.3% to $4,259.34 per ounce at 05:14 GMT, while U.S. gold futures for December delivery climbed by 1.4% to $4,273.

The rebound followed Friday’s 1.8% slump, the steepest drop since May, after Trump’s tariff comments triggered profit-taking. Still, gold remains up over 60% year-to-date, hitting an all-time high of $4,378.69 last week.

Analysts pointed to central bank buying, ETF inflows, geopolitical tensions, and de-dollarization as the main tailwinds driving its massive rally.

Spot silver was up 0.6% at $52.18 per ounce, recovering from Friday’s 4.4% crash, its worst since April, after peaking at a record $54.47 earlier in the day. Platinum surged by 2% to $1,589.60, while palladium eased 0.2% to $1,470.83.

The U.S. Dollar Index (DXY) traded around 98.40 during Monday’s Asian session, giving back the prior day’s gains. The weaker dollar added fuel to the rebound in gold and silver.

On the policy front, markets remain convinced the Federal Reserve will deliver a quarter-point rate cut at its October 29 meeting and another in December, based on CME’s FedWatch data. Inflation data due Friday is expected to show core CPI steady at 3.1% in September. That’s unlikely to change the Fed’s tone, as no official has publicly pushed back on market pricing for cuts.

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