US equities ended the week mixed. The Dow Jones and S&P 500 posted modest gains, while the Nasdaq Composite, S&P MidCap 400, and Russell 2000 fell. Concerns over elevated valuations and scrutiny of AI spending drove a rotation out of growth stocks through Thursday, before a volatile but catalyst-light Friday helped some indexes recover. The end of the longest US government shutdown provided some relief, but uncertainty persisted as the BLS signaled that October data may not be released and confirmed September jobs will come on November 20. Hawkish Fed commentary also weighed on sentiment. December rate-cut odds fell to about 46% from 67% a week earlier. Small caps underperformed, with the Russell 2000 down 1.8%. Treasury yields drifted modestly higher, municipals outperformed on strong demand, and high yield bonds gave back part of earlier gains.
The STOXX Europe 600 rose 1.77% as the US reopening boosted sentiment, though cooling AI enthusiasm capped upside. Major indexes advanced except the UK’s FTSE 100. Eurozone industrial production rose 0.2% m/m in September – well below expectations – due to steep Irish declines despite gains in Germany, Italy, and France.
