Equities rise while US bond yields dip with US reopening and interest rates in focus
Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., November 10, 2025. REUTERS/Brendan McDermid
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By Sinéad Carew and Dhara Ranasinghe
NEW YORK/LONDON :MSCI's global equities index rose slightly on Wednesday while U.S. Treasury yields fell and Wall Street indexes were a mixed bag as investors waited for U.S. Congress to end the federal shutdown and provide greater clarity on the health of the U.S. economy.
In currencies, the yen was in the spotlight as its fall to nine-month lows against the dollar prompted more comments from officials in Japan. And in U.S. Treasuries, yields were lower as investors prepared for more Federal Reserve rate cuts due to weak data and commentary from central bankers.
Meanwhile, the Republican-controlled House of Representatives is due later on Wednesday to vote on a compromise that the Senate approved on Monday, to restore funding to government agencies and end a shutdown that started on October 1. The longest ever U.S. government closure has disrupted food benefits for millions, left hundreds of thousands of federal workers unpaid, snarled air traffic, and paused crucial economic data releases.
While investors have been hopeful that a reopening would allow the resumption of data releases, the White House said that October jobs and inflation data reports might never be released due to the shutdown.
The Dow rose, the Nasdaq fell and the S&P 500 flitted between red and green during the session as investors sold off heavyweight technology stocks in favor of value stocks.
"People are feeling better about taking a little bit more risk. Money is flowing to some parts of the market that have been underperforming," said Irene Tunkel, chief U.S. equity strategist at BCA Research.
In particular, airline stocks were helping to push the Dow Jones Transportation average up more than 1 per cent on hopes that air travel would return to normal once the government reopens as crucial airport workers such as air traffic controllers will start getting paid again.
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On Wall Street, at 3:04 p.m. the Dow Jones Industrial Average rose 344.16 points, or 0.72 per cent, to 48,272.12, the S&P 500 fell 1.22 points, or 0.02 per cent, to 6,845.39 and the Nasdaq Composite fell 105.13 points, or 0.45 per cent, to 23,363.18.
MSCI's gauge of stocks across the globe rose 1.95 points, or 0.19 per cent, to 1,011.14.
Earlier the pan-European STOXX 600 index closed up 0.7 per cent, while Europe's broad FTSEurofirst 300 index ended up 0.77 per cent with both indexes hitting record highs, led by banks.
U.S. banks were also among the best performers on Wall Street as investors focused on the prospect of rate cuts and government reopening.
"The Fed is cutting rates, so that's probably a positive for banks and since the shutdown is likely over it means that economic activity will limp back to normalcy," said John Praveen, managing director at Paleo Leon in Princeton, NJ.
After the bond market closure on Tuesday for Veterans Day holiday, U.S. Treasuries prices rallied on Wednesday, driving yields lower as investors bet on further Fed rate cuts after Tuesday's weekly jobs data from ADP, which showed that U.S. private employers shed jobs in the four weeks ending on October 25.
Also, Atlanta Federal Reserve President Raphael Bostic said he would retire in late February. Since Bostic had voiced concerns about high inflation and sounded cautious about rate cuts in recent public comments, BCA's Tunkel said that investors were likely expecting a more dovish replacement, since the White House favors lower rates.
She also pointed to New York Federal Reserve President John Williams' reiteration on Wednesday that the time is getting closer for a U.S. central bank restart of bond purchases as part of its effort to maintain control over short-term rates.
The yield on benchmark U.S. 10-year notes fell 4.3 basis points to 4.067 per cent, from 4.11 per cent late on Monday while the 30-year bond yield fell 3.9 basis points to 4.6627 per cent.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, fell 2.5 basis points to 3.566 per cent, from 3.591 per cent late on Monday.
In currencies, the U.S. dollar gained on the euro and the yen as traders evaluated what a flood of economic releases will mean for Fed rate policy if the government votes to reopen, as is expected.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.05 per cent to 99.49, with the euro up 0.05 per cent at $1.1586.
Against the Japanese yen, the dollar strengthened 0.35 per cent to 154.69.
The yen's decline to nine-month lows had prompted fresh signs of angst from Tokyo, with Finance Minister Satsuki Katayama saying she would not deny that the negative aspects of the weak yen on the economy have become more pronounced than the positive ones.
Oil prices tumbled more than $2 per barrel on oversupply concerns as OPEC said global oil supply will match demand in 2026, marking a further shift from its earlier projections of a supply deficit.
U.S. crude settled down 4.2 per cent, or $2.55 at $58.49 a barrel and Brent settled at $62.71 per barrel, down 3.8 per cent, or $2.45, on the day.
Gold prices rose ahead of the House vote on the government reopening in anticipation of economic data that could set the stage for a December rate cut.
Spot gold rose 1.7 per cent to $4,196.59 an ounce. U.S. gold futures rose 2.19 per cent to $4,196.70 an ounce.
