Weekly market recap

U.S. stock indexes once again reached all-time highs last week, with the small-cap Russell 2000 Index joining the DJIA and S&P 500 in surpassing its previous intraday high, last achieved more than three years ago, on Monday. Although Donald Trump initially surprised the markets on Monday with his plan to impose 25% tariffs on goods from Mexico and Canada, news of a cease-fire between Israel and Hezbollah eventually boosted market sentiment. This allowed stock indexes to close the week—and the month of November—in positive territory. Optimism could extend into December, which, according to analysts at the Carson Group, has been the worst-performing month in only one year out of the last 95 years. By comparison, September has been the worst month 13 times over the same period, while April has been the worst so far this year, with a 4% loss.

European equities were also negatively affected by news of Trump’s proposed tariffs. However, positive sentiment ultimately prevailed in European markets as well, with most indexes closing the week and month in the green. The exception was French equities, which reacted negatively to concerns about next year’s budget. The pan-European STOXX Europe 600 ended 0.32% higher, Germany’s DAX rose 1.57%, France’s CAC 40 fell 0.29%, and the UK’s FTSE 100 gained 0.24%.

The Japanese yen strengthened significantly over the past week, reaching a six-week high. Investors responded positively to news of Tokyo’s inflation rising above 2%. Additionally, Bank of Japan Governor Kazuo Ueda stated on Saturday that another rate hike is “imminent” as economic data aligns with expectations. Tokyo inflation data is often regarded as a leading indicator of price developments across the country, though national inflation figures will not be released until after the Bank of Japan’s meeting. Nonetheless, the possibility of a rate hike has fueled hopes that the central bank will raise interest rates in December, contributing to the yen’s strength.

The US dollar weakened significantly during the week, marking its first losing week in nine weeks. This decline followed market reactions to the announcement of a new Treasury Secretary, who is expected to implement less drastic measures and promote stability. Furthermore, PCE Price Index data met expectations, prompting markets to increase their expectations of another Fed rate cut at the December meeting.