U.S. Stocks, Treasuries, Gold, and Oil Rally Across the Board

Market Overview

Investor sentiment staged a notable rebound yesterday, as markets increasingly priced in the “soft landing” scenario—an economic slowdown sufficient to justify Federal Reserve rate cuts, but not severe enough to tip the economy into a deep recession.

Risk assets and safe havens both moved higher on this optimism. The three major U.S. equity benchmarks posted strong gains, with the Nasdaq closing at a record high and the S&P 500 approaching its all-time peak. U.S. and European government bond prices rose for a fourth consecutive session, driving the 10-year Treasury yield to a fresh five-month low, underscoring expectations for lower rates ahead.

In commodities, OPEC+ announced it would implement only a modest output increase in October, easing concerns about oversupply. Crude oil prices snapped a three-day losing streak, climbing off a three-month low. Gold extended its momentum, with spot prices surging more than 1% intraday to another record high.

Hot Topics Ahead

Argentinas Triple Shock in Equities, Bonds, and Currency

In a key provincial election representing nearly 40% of Argentina‘s electorate, President Milei’s party garnered just 33.9% of the vote—well behind the Peronist Alliance‘s 47%. The result shocked markets and cast uncertainty over next month’s midterm elections. Analysts expect a negative market reaction, with higher sovereign risk premiums. The Merval stock index fell more than 13%, yields on Argentinas 2035 U.S. dollar bonds spiked toward 13%, and the peso briefly plunged 7% against the dollar.

Signs of Weakness in the U.S. Labor Market

The New York Feds latest survey showed U.S. one-year inflation expectations ticking up to 3.2% in August from 3.1%. Three-year expectations held steady at 3%, and five-year expectations remained at 2.9%. However, confidence in the ability to switch jobs fell to a record low. Meanwhile, the share of respondents expecting the unemployment rate to rise a year from now climbed to 39.1%, up 1.7 percentage points from July. The data points to mounting strains in the labor market.

Key Data to Watch

• 18:00 GMT+8 — U.S. NFIB Small Business Optimism Index (August)

• 22:00 GMT+8 — U.S. Benchmark Revision to Nonfarm Payrolls (Preliminary, thousands)