Tech-led rally lifts U.S. markets as government funding returns. Stocks jumped after the U.S. Senate approved a funding deal that will end the longest government shutdown in U.S. history. That decision matters now because it clears the way for a wave of delayed economic data to return to the calendar this month. In the short term markets look to re-price earnings and liquidity as big tech rebounds. Over the longer term the episode tests how resilient markets are to policy uncertainty, changing foreign flows and the pace of AI-driven profit cycles. The move matters globally as Japanese investors cash in AI gains, European yields react to weak U.K. labour data and emerging markets watch dollar and rate swings closely.
Market open preview: a holiday-thinned session with fresh data risk
Reopening clears backlog of economic releases while trading volumes stay light.
Wall Street staged a strong rebound on Tuesday after the U.S. Senate passed a stopgap funding bill. The vote reduces immediate political risk and restores a pipeline of economic releases that had been frozen during the shutdown. That return of data matters now because more than 40 days of missing figures will be folded into market expectations in quick succession. Traders face a compressed schedule that could exaggerate day to day moves.
Despite the bounce, the rally ran out of steam into Veterans Day when many markets are closed or thinly traded. Futures stalled into the holiday open, suggesting that today’s session may be driven more by positioning than by fresh conviction. Short term, investors will watch how megacaps hold gains. Medium term, attention will shift to whether the incoming economic prints confirm a still-resilient labour market or show cracks that would alter Federal Reserve thinking.
Tech and megacaps: AI demand drives bulls while profit trims temper the move
AI-fuelled gains are powering returns but corporate guidance is now a key test.
Big technology names led Tuesday’s advance. Nvidia (NASDAQ:NVDA) jumped as the chip maker prepares to report quarterly results next week. The stock’s bounce reclaimed some ground after a recent 15% slide. Investors are watching revenue and guidance for AI demand signals. Palantir (NYSE:PLTR) rose strongly and Tesla (NASDAQ:TSLA) added to gains as megacap strength pushed the S&P 500 higher.
At the same time, not every AI story stayed on a straight path. Shares of a cloud AI services provider backed by Nvidia fell after that company trimmed its annual revenue forecast. That move removed some of the sheen from a solid September quarter and shows the market is now sensitive to guidance updates. For traders, the key question is whether upcoming earnings confirm continued acceleration in AI cloud spending or whether some pockets of demand are saturating. Either outcome will affect short term momentum in tech names.
Macro backdrop: delayed data, Fed posture and inflation considerations
Reopening the data tap put pressure on the idea of additional rate cuts this year.
The return of government data matters to markets because Federal Reserve officials will use those figures to judge policy. Many Fed members appear skeptical that the delayed prints will show enough weakness to justify another rate cut before year end. Labour market resilience and loose financial conditions are weighing on the case for lower rates. Futures still price a meaningful chance of a December cut. However, several officials are signalling caution, which could reduce expectations for further easing.
Investors should watch employment and inflation components closely as they are likely to swing market sentiment more than usual while the backlog clears. If the data confirm a firm labour market, the bond market may price less rate relief and the dollar could strengthen. Conversely, surprise weakness would reshape rate odds and boost risk assets. Either path will influence Treasury yields, corporate borrowing costs and cross border flows.
Global spillovers: Japan selling, soft U.K. labour readings and currency moves
Profit taking in Asian portfolios and weak U.K. wage growth are shifting capital and yields.
Japanese investors sold notable amounts of foreign equities last month to lock in gains from the AI rally. Net sales were the largest monthly outflow since June. That behaviour underlines how gains concentrated in technology have prompted portfolio rebalancing across regions. In addition, SoftBank Group (TSE:9984) reported a doubling of quarterly profit as valuation gains from its OpenAI-related investments flowed through. The firm said it trimmed its remaining Nvidia holdings after earlier repeat purchases and sales.
In Europe, U.K. data showed unemployment rose to four year highs and wage growth cooled. That news pushed gilt yields and Sterling lower and increased speculation that the Bank of England could consider loosening policy sooner than markets expected. Currency moves and rate divergence will matter for multinational earnings and emerging market funding costs. Emerging markets watch both the dollar and U.S. yields because those variables determine funding conditions and capital flow direction.
What to watch today: data, Fed speakers and earnings in focus
Veterans Day keeps bonds closed while delayed releases and Fed commentary shape the tape.
Trading will be thinner due to Veterans Day closures in U.S. bond markets. Still, the calendar includes a small business survey that will offer early colour on hiring and prices for October. Fed commentary from regional officials and board members will be parsed for any change in the majority view on rate cuts. Earnings season continues to matter as well. Companies that report guidance this week will test whether the AI-fuelled demand narrative translates into sustainable revenue growth.
In the near term, market participants should watch how megacap stocks hold their gains and how Treasury futures price the path for rates when bonds reopen fully. Global flows will remain an important theme as Japanese profit taking and U.K. labour data interact with dollar moves. Together, those forces will drive cross asset volatility as the backlog of economic information is absorbed.
Markets enter the coming session with a clearer political backdrop but with a compressed economic agenda. That combination raises the chance of sharp headline driven moves. Investors will now try to sort whether the bounce is a regrouping for the next leg higher in tech or a pause before renewed volatility. The answer will hinge on earnings detail and the torrent of delayed U.S. data that will arrive now that government funding has been restored.
