Global markets rose on Thursday after US private sector hiring and services activity beat expectations, even as the longest federal government shutdown continued to disrupt key economic data.
US private sector employment rose by 42,000 in October, beating forecasts and easing concern about a weakening labor market, according to ADP Research. The Institute for Supply Management services Purchasing Managers Index for October increased to 52.4, also above estimates, indicating continued economic expansion.
Money market pricing saw the likelihood of a Federal Reserve rate cut fall to 62% as signs of cooling in the labor market moderated.
The news came as the Supreme Court is weighing US President Donald Trump's tariffs to determine whether he exceeded his emergency powers under the International Emergency Economic Powers Act. US Solicitor General John Sauer argued that the act helped secure trillion-dollar agreements with major partners such as China and said the rise in revenue from regulatory tariffs was coincidental. Neal Katyal, representing the challengers, said Trump bypassed Congress to impose the tariffs. The court has not issued a ruling. Treasury Secretary Scott Bessent said he expects a decision favoring Trump.
Most Supreme Court rulings come in months, but this one might be fast tracked.
Separately, during the ongoing shutdown, Transportation Secretary Sean Duffy said capacity will be reduced 10% at about 40 airports beginning Friday to ease pressure on air traffic controllers working without pay.
The S&P 500 rose 0.37%, the Nasdaq 0.65%, and the Dow Jones Industrial Average 0.48% on Wednesday, before opening mixed on Thursday. The US 10-year Treasury yield climbed to 4.16% on Wednesday amid the tariff deliberations and hovered at 4.15% on Thursday. The US Dollar Index closed Wednesday at 100.2 and traded 0.2% lower at 100 on Thursday.
In Europe, investors focused on the Bank of England's monetary policy meeting. With September inflation at 3.8%, above the 2% medium-term target, the bank is widely expected to keep its policy rate at 4% and hold off on cuts until February 2026.
Budget planning discussions are ongoing across the continent. Talks in France continue amid disputes, while drone sightings at military facilities have expanded. A suspicious device was detected near a base in Leuven's Heverlee district. Drone activity was first recorded at Belgium's Elsenborn camp on Oct. 3. Probes are underway after similar incidents in Poland, Romania, Estonia, and Denmark.
The FTSE 100 rose 0.64%, the FTSE MIB 30 0.41%, the CAC 40 0.08%, and the DAX 40 0.42% on Wednesday, and also opened higher on Thursday.
Asian stocks advanced as improved risk appetite in the US supported regional sentiment. Asian indexes had fallen earlier in the week alongside declines in US tech stocks on valuation concerns but rebounded strongly.
Toyota Motor reported a 7% drop in net profit for April to September compared with a year earlier, totaling $11.5 billion, but projected operating profit of $22.6 billion for the fiscal year ending in March. Toyota shares rose 4.5% near the close of trading on the Nikkei 225. Japan's services PMI came in at 53.1, above expectations, and its composite PMI rose to 51.5.
The Nikkei 225 gained 1.5%, the Kospi Index 1.6%, the Hang Seng Index 1.65%, and the Shanghai Composite Index 0.9%.
