U.S. stocks closed higher on Friday, with all five major indexes advancing after Thursday’s selling to concerns about artificial-intelligence revenues. The Dow led the gains, while the Nasdaq Composite rose for a fourth consecutive week.

Economic data were less encouraging. The preliminary October University of Michigan consumer sentiment index weakened, while one- and five-year inflation expectations increased. Canada reported another sharp monthly employment decline, sending the Canadian dollar lower. Stocks, precious metals and Bitcoin nevertheless ended the session higher. Those releases carry policy weight on both sides of the border: U.S. inflation data feed into Federal Reserve rate expectations, while Canadian labor figures inform the Bank of Canada’s decisions.

Source: investingLive Americas FX news wrap, Oct. 9

Dollar mixed as Canadian dollar comes under pressure

The U.S. dollar finished mixed. It was strongest against the Canadian dollar and Japanese yen, gaining about 0.25% against each, and weakest against the Australian dollar.

The late-session snapshot of major currency pairs showed:

• EURUSD: 1.1201, down 0.07%.
• USDJPY: 158.26, up 0.25%.
• GBPUSD: 1.3233, up 0.07%.
• USDCHF: 0.8300, down 0.17%.
• USDCAD: 1.4261, up 0.25%.
• AUDUSD: 0.6985, up 0.43%.
• NZDUSD: 0.5613, up 0.05%.

USDCAD rose from around 1.4232 before Canada’s employment report to near 1.4293 afterward. The pair later retraced part of the move, but the Canadian dollar remained under pressure. The reaction underscored how tightly the loonie trades around Canadian labor releases, which are among the most closely watched inputs to the Bank of Canada’s policy outlook.

Treasury curve flattens

Treasury yields were mixed near the close. Shorter-dated yields moved higher, while the 30-year yield edged lower:

• 2-year: 4.7911%, up 3.51 basis points.
• 5-year: 5.0211%, up 3.01 basis points.
• 10-year: 5.2441%, up 1.11 basis points.
• 30-year: 5.6001%, down 0.69 basis point.

The combination flattened the Treasury curve. Shorter-dated yields are typically the most sensitive to expectations for Federal Reserve policy, so their rise offered a read on how investors view the near-term rate path. Higher near-term inflation expectations gave traders another reason to remain cautious about the inflation outlook, even as consumer sentiment weakened.

U.S. stocks finish higher

The major U.S. indexes closed higher across the board:

• Dow industrial average: 51,660.18, up 423.06 points, or 0.83%.
• S&P 500: 7,811.54, up 46.18 points, or 0.59%.
• Nasdaq Composite: 27,366.17, up 172.83 points, or 0.64%.
• Russell 2000: 2,806.9815, up 12.8535 points, or 0.46%.
• Nasdaq 100: 30,883.15, up 157.34 points, or 0.51%.

The rebound extended beyond technology. The Dow outperformed, and small-cap stocks also participated. The advance followed concerns about AI spending, revenues and valuations that contributed to Thursday’s decline — a debate that has become one of the equity market’s central storylines as investors weigh whether heavy spending on artificial intelligence will generate revenue fast enough to justify the valuations attached to the sector.

In Adam’s afternoon review, he said Thursday’s OpenAI revenue comparison required an adjustment for partner revenue. He also noted that the dollar fell alongside AI shares during the initial reaction, an unusual response for a currency that often benefits when risk assets decline.

European stocks rise but most markets post weekly losses

European stocks also finished higher on Friday:

• Germany’s DAX: 25,087.28, up 1.13%.
• France’s CAC: 7,803.34, up 0.95%.
• UK’s FTSE 100: 10,552.04, up 1.06%.
• Spain’s IBEX: 19,033.10, up 0.55%.
• Italy’s FTSE MIB: 49,746.30, up 0.91%.

Friday’s gains did not erase weekly losses in most markets. Italy fell 1.46% for the week, France declined 1.19%, Germany lost 0.57% and Spain slipped 0.27%. The UK was the exception, gaining 0.86% over the week. French unrest and fiscal uncertainty remained part of the European backdrop.

Michigan sentiment falls as inflation expectations rise

The preliminary October University of Michigan consumer sentiment index fell to 46.3 from 48.1, below the 47.8 estimate. Current conditions were particularly weak at 44.7, compared with expectations of 51.0. The expectations component was better than forecast at 47.3, versus an estimate of 45.5.

Inflation expectations increased:

• One-year expectations: 4.7%, up from 4.6%.
• Five-year expectations: 3.5%, up from 3.4%.

The headline reading remained above the 44.8 low recorded in May, but the combination of weaker sentiment and higher expected prices was a concern for policymakers. University of Michigan inflation expectations are watched closely because households’ views of future prices are considered an input to inflation dynamics. Consumer price index and producer price index data due next week will contribute to the calculation of the personal consumption expenditures measure, the Federal Reserve’s preferred inflation gauge.

Canada loses another 68,300 jobs

Canada’s September employment report showed a decline of 68,300 jobs, sharply missing expectations for a 9,200 increase. Following August’s 41,700 decline, employment fell by 110,000 over the two months.

Full-time employment decreased by 35,400, while part-time employment fell by 32,900. The unemployment rate rose to 6.5% from 6.4%, and the participation rate slipped to 64.8% from 65.0%. The decline in participation limited the increase in the unemployment rate.

The headline decline included several qualifications. Public-sector employment fell by 70,000, while private-sector employment rose by 24,100. Decreases in education and youth employment also raised questions about seasonal adjustments surrounding the return to school.

Nevertheless, the second consecutive large monthly decline was significant. Wage growth for permanent employees increased to 2.3% from 2.0%, creating an additional consideration for the Bank of Canada, a tension central banks typically weigh when setting policy.

Oil little changed as Iran remains a weekend risk

WTI crude futures were near $91.50 in the supplied snapshot up $0.01, or 0.01%.

Earlier relief followed President Trump’s comments that discussions with Iran were productive and that attacks on Tehran would be deferred until after the midterm elections. The comments reduced the immediate escalation premium but did not resolve the conflict or the risks to energy supplies.

The afternoon Baker Hughes report showed total U.S. rigs rising by five to 603. Oil rigs increased by six to 462. Rig counts are followed as a gauge of future U.S. supply, making the weekly report a standing item for energy traders assessing market balance.

Gold and silver advance

Precious metals posted solid gains in the late-session snapshot:

• Spot gold: $4,196.065, up $62.375, or 1.51%.
• Silver: $60.7912, up $1.6107, or 2.72%.

Gold advanced despite higher two-, five- and 10-year Treasury yields. The mixed dollar and slightly lower 30-year yield provided a less uniform headwind. Higher inflation expectations may also have contributed, although the session’s data do not establish a single driver for the move. The metal is traditionally treated as a store of value in inflationary environments, which is why shifts in inflation expectations tend to draw attention from gold traders.

Bitcoin edges higher

Bitcoin traded near $82,316, up $640, or 0.78%. The move was consistent with the recovery in equities. Bitcoin advanced during a stronger session for risk assets, although the move did not establish a separate trend from broader markets.

Focus turns to next week

Stocks recovered on Friday, but inflation concerns and questions about AI economics remain. Weak Canadian employment data added another issue for currency traders, while Middle East developments could affect markets over the weekend. Key items to watch include the CPI and PPI prints, any weekend developments in the Middle East, and how Canadian labor data shapes expectations for the Bank of Canada.

Monday brings a split holiday session. U.S. stocks will trade normally, the U.S. bond market will be closed, and Canadian markets will close for Thanksgiving. Trading conditions could therefore be thinner as the new week begins.