HSBC Soars on $3B Buyback, Megacap Earnings Awaited

HSBC shares gained as the bank announced a $3 billion buyback and reported a 10% profit rise. US markets brace for a wave of earnings from tech giants like Alphabet and chipmaker AMD, beginning today, with Tesla’s ambitious sales forecasts sparking last week’s stock rally. Investors are watching US job openings data, with Friday’s payroll report set to influence the Fed’s rate decision.

Equities

The FTSE 100 rose 0.43% on Monday, as a broader rally in UK markets was driven by travel, leisure, and aerospace stocks, while losses in commodity-linked companies limited overall gains. Online train ticket seller Trainline surged by 9.5% after raising its annual revenue forecast for the second time in less than two months.

Aerospace components supplier Melrose led gains on the blue-chip index, climbing 9.3% following its release of a new risk- and revenue-sharing partnerships model, which boosted the aerospace and defence sector by 0.9%. However, energy shares fell, with BP and Shell both down over 1.6%, as oil prices dipped sharply following an Israeli retaliatory strike on Iran that spared key energy facilities. Additionally, precious metal miners slid 1.7% as gold prices weakened amid a stronger US dollar and rising Treasury yields.

In the US, Wall Street's main indices also rose modestly ahead of a major earnings week for several megacap companies and as investors anticipated the upcoming Nov. 5 presidential election. The S&P 500 gained 0.27% to close at 5,823.52, while the Nasdaq Composite added 0.26% to 18,567.19, and the Dow Jones Industrial Average rose 0.65% to 42,387.57. Among the companies in focus, Boeing’s stock dipped 2.8% after announcing a stock offering aimed at raising up to $22 billion to bolster its finances amid a worker strike. Meanwhile, 3M shares surged 4.4% after JP Morgan raised its price target for the company, adding strength to the Dow.

The Russell 2000 small-cap index outpaced major indices, jumping 1.63% as investor optimism grew around small caps leading in a potential economic recovery.

Forex & Commodities

The US dollar drifted close to a three-month high, supported by expectations that the Federal Reserve will maintain its cautious stance on interest rate adjustments, with the JOLTS job openings report due later in the day and monthly payroll data expected on Friday. The dollar index held firm at 104.29, after touching 104.57 overnight, a level last seen in late July. Against the yen, the dollar eased slightly by 0.23% to 152.92 yen, following Monday’s climb to 153.885, a peak since July.

Gold prices hovered near record highs, reaching $2,753.00 an ounce, up 0.4%, as investors sought a hedge against election-related volatility in the US. Rising Treasury yields also played into gold’s strong positioning, while silver and platinum posted moderate gains. Oil prices remained under pressure, with Brent crude trading at $71.46 a barrel and US West Texas Intermediate crude slightly lower at $67.37. Monday’s 6% drop, the largest since early October, followed signs of de-escalation in Middle East tensions, as Israel’s recent retaliatory strikes on Iran avoided key oil infrastructure, temporarily calming supply concerns.

In Japan, the yen showed resilience after a weak Monday, with investors assessing Japan’s political landscape following the coalition government’s significant losses in weekend elections. This result is expected to influence fiscal policy and might affect the Bank of Japan’s approach to ultra-loose monetary policy, though no changes are anticipated in Thursday's central bank decision.