US stocks rose for the week despite volatility from US-China trade tensions and higher oil prices after sanctions on Russian oil firms. Small- and mid-cap indexes outperformed, led by gains in technology and energy stocks. Inflation came in slightly below expectations, with headline CPI at 3.0%, while business activity strengthened as PMIs showed expansion across both services and manufacturing. Treasury yields diverged, with short-term rates rising and long-term yields falling.
European markets advanced, with the STOXX Europe 600 up 1.68% and the UK’s FTSE 100 leading gains. UK inflation held steady at 3.8%, while retail sales rose unexpectedly, fueling expectations of a rate cut later this year. Germany and Italy posted solid gains, though France lagged behind. In the eurozone, economic momentum strengthened as October’s PMI readings hit their highest levels since mid-2024, reflecting robust service-sector expansion and modest improvement in manufacturing output. Germany showed the strongest recovery, while France continued to lag with another month of contraction. Consumer confidence improved for a second month, reaching its highest level in eight months, signaling that households are becoming more optimistic about the economic outlook across both the eurozone and the broader European Union.
