Stocks rally resumes as gold breaks above $4,000: Markets Wrap

by Robert Brand and Julien Ponthus 

US equity futures gained, suggesting the stocks rally is set to resume as investors cast aside worries about lofty valuations and the billions pouring into artificial intelligence. Gold surged above $4,000 an ounce. 

Contracts on the S&P 500 were about 0.2% higher after the benchmark snapped an eight-day winning streak. Nasdaq 100 futures also rose. Advanced Micro Devices Inc. extended gains in premarket trading after an explosive rally following its multibillion AI deal with OpenAI. Tesla Inc. advanced after it unveiled a cheaper version of its top-selling electric vehicle. 

Concerns have been growing that $16 trillion surge in the S&P 500 from its April lows had gone too far. Tuesday’s drop came amid mounting chatter about lofty valuations around artificial intelligence, with some market participants seeing an echo of the excesses that led to the dot-com crash 25 years ago. Still, many investors fear missing out on further gains, with the upcoming earnings season set to provide clues on the rally’s sustainability. 

“There are worrying signals on the AI rally, which reminds me of 1997 when I started my career,” said Gilles Guibout, head of European equities at Axa Investment Managers. “The bubble burst in 2000 but those managers who had refused to follow the rally, rightfully expecting it to go pop, lost a lot of money for their clients. There’s a real risk to get out of the AI trade too early; what you need to do is stay invested but with your finger on the exit button and stay diversified.” 

The dollar gained for a third day against major peers, while Treasury yields dipped. 

Europe’s Stoxx 600 benchmark climbed 0.6%, on track for another record close, as the basic resources sector jumped more than 1%. Lloyds Banking Group Plc led banks higher after a favorable ruling on the cost of disputed car loans. European stocks were also buoyed by moves to resolve France’s budget impasse. The country’s CAC 40 equity index rose as much as 0.8% and bond yields fell. 

The European technology sub-index, however, underperformed. BMW AG slumped, dragging peers lower, after the German luxury-car maker cut its financial guidance on weak sales in China and tariff-related costs.  

Investors had cheered a wave of AI alliances this month, involving OpenAI, Nvidia Corp. and Asian companies such as Hitachi Ltd. and Fujitsu Ltd. The Elon Musk-backed artificial intelligence startup xAI is also raising more financing than initially planned — including an equity investment from Nvidia — to bring its ongoing funding round to $20 billion. 

Billionaire Ray Dalio — who founded the hedge-fund firm Bridgewater Associates — expressed reservations about the scale of the stock market’s recent rise, which has stoked concern about an AI bubble as valuations have soared.  

“This is something that feels frothy to me,” Dalio said. 

Dalio sees gold as a strong store of value at a time of rising government debt burdens, geopolitical tensions, and the erosion of confidence in the stability of national currencies. 

Concerns over the US economy and a government shutdown added fresh momentum to gold’s surge, with its 53% gain this year putting the traditional safe haven on course for its strongest annual advance since 1979. The metal climbed as much as 1.4% on Wednesday to $4,039.05 an ounce. 

Meanwhile, the yen fell to its lowest level since February, weighed down by Sanae Takaichi’s unexpected win to head Japan’s ruling Liberal Democratic Party. The markets curbed their expectations for a Bank of Japan interest-rate hike in the aftermath of the victory by the pro-stimulus lawmaker. 

Elsewhere, New Zealand’s currency fell after the central bank cut interest rates and signaled openness to more.  

Corporate News: 

• ABB signed an agreement to divest its Robotics division to SoftBank Group for an enterprise value of $5.375 billion and not pursue its earlier intention to spin-off the business as a separately listed company. 
• UBS Group AG has shelved a significant risk transfer transaction tied to 2 billion francs ($2.5 billion) of loans. 
• Security services group Verisure Plc’s shares rallied in its trading debut, after the initial public offering raised about €3.2 billion ($3.72 billion) in the largest European debut in three years. 
• ASML Holding NV shares fell after US lawmakers accused the Dutch chip equipment maker of boosting China’s semiconductor industry, raising the specter of further export controls on the company’s lithography machines. 

Some of the main moves in markets: 

Stocks 

• S&P 500 futures rose 0.2% as of 5:43 a.m. New York time 
• Nasdaq 100 futures rose 0.2% 
• Futures on the Dow Jones Industrial Average rose 0.2% 
• The Stoxx Europe 600 rose 0.5% 
• The MSCI World Index was little changed 

Currencies 

• The Bloomberg Dollar Spot Index rose 0.2% 
• The euro fell 0.4% to $1.1614 
• The British pound fell 0.1% to $1.3408 
• The Japanese yen fell 0.7% to 152.93 per dollar 

Cryptocurrencies 

• Bitcoin rose 0.4% to $122,517.01 
• Ether fell 0.6% to $4,483.4 

Bonds 

• The yield on 10-year Treasuries declined one basis point to 4.11% 
• Germany’s 10-year yield declined two basis points to 2.69% 
• Britain’s 10-year yield was little changed at 4.71% 

Commodities 

• West Texas Intermediate crude rose 1.3% to $62.56 a barrel 
• Spot gold rose 1.4% to $4,039 an ounce 

This story was produced with the assistance of Bloomberg Automation. 

© 2025 Bloomberg L.P.