Asian stocks trade mixed, gold dips on China move

Synopsis

US equity futures edged higher, suggesting global stocks' seven-month rally may continue. Despite mixed tech earnings and Fed rate cut uncertainty, optimism prevails. China's signals on rare earth exports and semiconductor investigations also boosted sentiment, as oil climbed on OPEC+ decisions.

US equity-index futures advanced in early Monday trading, indicating that the seven straight months of gains in global stocks may still have more room to run.

Contracts for the S&P 500 and the Nasdaq 100 indexes rose 0.3% after gains on the underlying gauges Friday, with earnings optimism outweighing worries about a rally that’s heavily concentrated on tech giants. Asian shares were mixed with South Korea rising and Australia declining. Markets in Japan and cash trading of Treasuries were closed on Monday due to a holiday.

Gold fell 1% after China scrapped a long-standing gold tax incentive. West Texas Intermediate crude oil rose as much as 0.8% after OPEC+ decided to pause output increases during the first quarter.

Stocks have rallied to record levels, even after a warning from the Federal Reserve that a rate cut in December isn’t a foregone conclusion and earnings from megacap tech companies were mixed. Trade relations between the US and China were also a big theme, and during the weekend, Beijing signaled plans to suspend new export controls on rare earth metals and end investigations into US firms in the semiconductor supply chain.

“We come off what was one of the biggest weeks of the year,” wrote Kyle Rodda, a senior analyst at Capital.com in Melbourne. “The markets head into the new week in an interesting position: sentiment is bullish,” especially with the Fed risk-event out of the way.

Since its April slump, the S&P 500 has roared back nearly 40%, marking its longest monthly winning streak since 2021. The Nasdaq 100’s performance has been even more striking: a seven-month rally, its best run in eight years, powered by tech’s strong balance sheets and unrelenting AI optimism.

In commodities news, China announced the scrapping of a long-standing gold tax incentive in a potential setback for consumers in one of the world’s top bullion markets.

Also, OPEC+ said it will pause output increases after making another modest hike next month.

The move comes as the market faces the prospect of a ballooning oversupply that has seen Brent lose 10% over the past three months. Prices have pulled back from a five-month low after increased US sanctions on Russia created question marks about the supply prospects from the major exporter.

Traders will also be watching a packed week for global central banks. Policymakers from Australia to Sweden and Brazil are expected to keep rates steady, while their counterparts in Mexico may deliver a cut. The Bank of England is expected to skip an interest-rate cut on Thursday.

In the US, the ongoing federal shutdown continues to cloud the outlook by disrupting key economic data releases.

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