US markets start the week strong as Senate moves toward shutdown resolution

Wall Street began the week in positive territory, with the S&P 500 up 0.90%, the Nasdaq rising 1.50%, and the Dow Jones gaining more than 90 points amid optimism that the US government shutdown could soon be resolved. In a procedural vote yesterday, the Senate advanced the first stage of a deal to reopen the government, securing the required 60 votes. Eight Democratic senators broke ranks with party leadership, dropping their key demand for a guaranteed extension of Obamacare subsidies. Technology and communication services led the rally, both climbing nearly 2%, while consumer staples and real estate lagged. Among major movers, Nvidia gained 3.60%, Palantir rose 3.80%, AMD advanced 3.70%, and Micron Technology added 5.80%.

In South Africa, the main stock market index, the SAALL, climbed 1.83% from the previous session to 110 842 points.

In London, the FTSE 100 rose more than 1% on Monday to approach a record high near 9 800, supported by a global rebound as progress in Washington eased fears of a US government shutdown. Leading contributors included HSBC and AstraZeneca (both +1.70%), Rolls-Royce (+2.50%), BP (+1.30%), Shell (+0.90%), and British American Tobacco (+0.90%). Precious metals gained on expectations of a potential Federal Reserve rate cut, boosting miners Fresnillo (+6%) and Endeavour (+4%). Diageo jumped 5.20% following the appointment of former Tesco CEO Dave Lewis, signalling a potential cultural shift within the company.

Across Europe, equities rallied on Monday, rebounding from three-week lows reached on Friday as investors welcomed early signs that the prolonged US government shutdown could soon be resolved and concerns over last week’s technology sell-off eased. The STOXX 50 surged 1.80% to 5 670 points, while the broader STOXX 600 climbed 1.50% to 573 points, after US House Speaker Mike Johnson stated that the House of Representatives should vote “as soon as possible” following the Senate’s narrow approval on Sunday of the initial stage of a bill to end the shutdown.

In Asia, Japan’s Nikkei 225 Index rose 1.26% to close at 50 912, while the broader Topix Index gained 0.56% to 3 317 on Monday, recouping part of last week’s losses as risk appetite improved amid optimism that the record-long US government shutdown may soon end. The US Senate approved initial funding for key departments and agencies, although a Democratic proposal to extend enhanced Affordable Care Act tax credits was excluded.

In China, the Shanghai Composite added 0.53% to close at 4 019 on Monday, marking a fresh decade high. Defensive stocks led gains as investors rotated out of high-flying technology and AI shares. Chinese equities also tracked global markets higher, supported by improved risk sentiment on hopes that the prolonged US government shutdown will soon be resolved following the Senate’s approval of an initial funding bill. Leading performers included Guangzhou Tinci Materials (+2.90%), China Tourism Group (+10%), and Kweichow Moutai (+2%).

WTI crude oil futures steadied just below $60 per barrel on Monday as investors awaited market outlook reports from OPEC and the International Energy Agency later this week for fresh direction. Gold climbed 2% to $4 080 per ounce, hovering near its highest level since 24 October, driven by growing expectations of a Federal Reserve interest rate cut in December despite policymakers’ efforts to downplay the likelihood of such a move.