Global stocks extended their gains Friday, capping a week where investors looked past international trade tensions and bet that a strengthening U.S. economy could keep the rally intact.
Taking their lead from Wall Street’s record close on Thursday, stock markets from China to Germany were poised for strong weekly gains. The Stoxx Europe 600 was up 0.5% around midday, led by gains in the automotive and resources sectors. Asian markets rallied across the board.
In the U.S., futures pointed to a 0.1% opening gain for the S&P 500 and 0.2% rise for the Dow Jones Industrial Average after both indexes set new highs in the previous session. It was the S&P 500’s 19th record close this year.
The gains come as investors this week mostly shrugged off the imposition of new tariffs in the continuing trade spat between the U.S. and China. Market participants instead focused on the strong fundamental outlook, including solid corporate earnings and a robust U.S. economy, which is growing at its fastest rate since 2014.
“Risk is having a great time at the moment,” said Jim Reid, an analyst at Deutsche Bank, in a note to clients.
Underscoring the robust economic outlook, Labor Department data on Thursday showed that initial jobless claims, a proxy for layoffs across the U.S., fell to the lowest level since 1969.
“The broader picture is clear: the U.S. economy is doing very well,” said Eric Stein, co-director of global income at Boston-based Eaton Vance. “At some point you start to wonder if this is as good as it gets. But we are not there yet.”
Investors were also looking to next week’s Federal Reserve meeting. Most watchers are expecting the U.S. central bank to raise interest rates.
“With the economy doing well and inflation not picking up much, it has been easy for the Fed this year,” said Mr. Stein, who is expecting a rate rise next week and one more in December. “A year from now is where it gets more interesting.”
The 10-year U.S. Treasury yield rose slightly to 3.081%, compared with 3.076% on Thursday. Yields move inversely to prices.
The WSJ Dollar Index, which tracks the dollar against a basket of 16 currencies, was up 0.2%.
In Asia, Chinese equities led the way, with the Shanghai Composite closing up 2.5%, its biggest gain in six weeks. Japan’s Nikkei Stock Average rose 0.8% while Hong Kong’s Hang Seng finished up 1.7%.
In commodities, Brent crude, the global oil price benchmark, was up 0.2% while gold was up 0.1%.
Write to Georgi Kantchev at [email protected]