Global Rally Stalls as Traders Await Inflation Data and Track Trade Tensions – Europe Market Wrap

The global stock rally lost momentum as investors weighed renewed trade tensions, parsed a wave of corporate earnings, and awaited key US inflation data later this week.

Futures on the S&P 500 and Nasdaq 100 erased early gains, signaling that Monday’s 1% Wall Street surge may fade at the open. A gauge of the dollar climbed for a third straight day, with the greenback strengthening against all Group-of-10 peers. Gold and silver retreated sharply, giving back a portion of their recent record-breaking gains as the stronger dollar pressured commodities.

The S&P 500 has still posted its largest two-day advance since June, as the third-quarter earnings season gathers pace — with roughly 85% of US companies so far topping profit expectations.

Despite headwinds from the US government shutdown and ongoing trade frictions, equity pullbacks have been short-lived, with investors continuing to treat market dips as buying opportunities. Global stocks remain near record territory after rebounding from their April slump, buoyed by optimism that massive corporate spending on artificial intelligence will ultimately pay off.

Traders are closely monitoring progress in US-China trade negotiations. President Donald Trump reiterated his threat to impose higher tariffs on Chinese goods “if there isn’t a deal” by Nov. 1, though he confirmed plans to meet with President Xi Jinping next week.

Attention is also turning to inflation reports delayed by the shutdown. The US consumer-price data — now due Friday — will offer fresh insight into the economy’s strength and the Federal Reserve’s next move on interest rates, while the UK releases its own inflation figures Wednesday.

In Europe, the Stoxx 600 index was little changed, hovering near a record high, with miners leading losses after the precious metals selloff sparked by the stronger dollar.