Wall Street roared back to life on Friday as investors cheered a surprise uptick in U.S. manufacturing activity, providing a much-needed boost after a tumultuous week. The S&P 500 and Nasdaq Composite indexes climbed over 2%, recouping some of their recent losses, while the embattled gold market finally showed signs of stabilizing.
Defying Expectations
The closely-watched Institute for Supply Management (ISM) manufacturing index unexpectedly rose to 52.6 in September, confounding economists who had predicted a decline. This unexpected resilience in the factory sector eased concerns that the U.S. economy was sliding into a recession, helping to power the stock market rebound.
"What this really means is that the underlying strength of the U.S. economy is still intact, despite all the headwinds from trade tensions and global growth worries," said Garrett Melson, portfolio strategist at Natixis Investment Managers. "The data suggests the manufacturing sector is weathering the storm better than many had feared."
Gold Selloff Slows
Meanwhile, the recent rout in gold prices appeared to be losing steam, with the precious metal hovering just below the $1,500 per ounce mark. After hitting an all-time high of over $2,000 per ounce in August, gold had plunged nearly 25% as investors fled to the safety of the U.S. dollar.
"The bigger picture here is that gold is still in a strong long-term uptrend, driven by factors like geopolitical tensions and expectations of further interest rate cuts," explained John Ruwitch of Reuters. "This latest pullback was likely just a healthy correction after the metal's parabolic rise."
As the dust settles, markets appear to be regaining their footing, with both stocks and gold finding support from resilient economic data and the prospect of more dovish monetary policy. However, the road ahead remains uncertain, with trade disputes and political turmoil still casting a shadow over the global economy.