Global markets are entering Friday on a firmer footing after a week of turbulence, as stronger-than-expected U.S. data restored some confidence in the world's largest economy, even while concerns over high valuations and uneven growth continue to temper sentiment.
Overnight in Asia, Japan's Nikkei 225 advanced about 1.4 %, led by semiconductor and robotics shares, while South Korea's Kospi added roughly 0.8 % amid renewed buying in chipmakers and exporters. Hong Kong's Hang Seng Index climbed 1.1 %, helped by a rebound in Chinese technology stocks after Beijing signaled additional liquidity support for key sectors. Mainland China's CSI 300 rose about 0.5 %, its first gain in three sessions, as investors took comfort from stable credit data and hints that policymakers may accelerate fiscal spending before year-end.
The upbeat tone followed data showing that U.S. private payrolls grew by roughly 42,000 in October, outpacing estimates, and that the ISM Services Index improved to around 52.4, suggesting continued expansion in the services sector.
Together, the numbers reinforced the view that the U.S. economy remains resilient despite months of tightening financial conditions. Treasury yields initially rose on the data, with the 10-year yield touching 4.65 %, before easing slightly as traders recalibrated expectations for Federal Reserve policy. Futures markets now imply roughly a 60 % probability of a Fed rate cut by March 2026, down from more than 80 % a week earlier.
For U.S. investors heading into Friday, the message is mixed. On one hand, robust data supports earnings durability for cyclical and industrial sectors. On the other, it raises the risk that the Fed will keep rates higher for longer, which could pressure valuations in high-growth areas such as AI and cloud computing.
The S&P 500 is on track to open modestly higher, hovering near the 6,770 level, while futures for the Nasdaq 100 suggest a more cautious start after a sharp rally earlier in the week. Analysts expect the day to hinge on whether U.S. bond yields remain contained and whether global momentum, particularly from Asia, carries through into U.S. trading hours.
Energy and commodities could also shape market direction. Brent crude stabilized near $83 per barrel after a two-week decline, supported by signs of steady demand from Asia and U.S. inventory drawdowns. The U.S. dollar index traded near 105.8, holding firm against the yen and euro.
A stronger dollar could limit gains for exporters but offers a measure of stability for investors seeking safety amid geopolitical and inflation uncertainties. In short, Friday is shaping up as a test of how long optimism about growth can coexist with the realities of expensive valuations. If yields drift lower and risk appetite broadens beyond big-cap tech, equities could end the week on a constructive note. If not, expect renewed volatility and a potential pullback in the overheated AI trade.
