Global markets witnessed a broad rally in commodities on Friday, with gold, silver, and oil prices all climbing higher amid renewed geopolitical tensions and shifting macroeconomic sentiment.
Oil prices extended their winning streak to six consecutive sessions on Friday, as persistent concerns over Iran's crude exports and the security of shipping through the strategic Strait of Hormuz continued to drive market anxiety. In the precious metals sector, both gold and silver advanced on the back of a weaker U.S. dollar and heightened safe-haven demand from investors seeking refuge from uncertainty.
Turning to equities, Wall Street staged a solid rebound on Friday following a turbulent week. After a sharp sell-off triggered by a spike in Treasury yields earlier in the session, the U.S. bond market found some stability, allowing investor risk appetite to recover modestly. Bargain hunters stepped in to snap up beaten-down stocks, adding further momentum to the rally. Adding to the positive tone, S&P Global's August Purchasing Managers' Index (PMI) revealed that U.S. business activity had accelerated notably, with the composite PMI output index hitting its highest level in over four years. The services sector emerged as the primary engine of economic growth, while the labor market also showed signs of simultaneous improvement. Against this backdrop, all three major U.S. indices closed higher on Friday, with the Dow Jones Industrial Average climbing 0.98%, while both the S&P 500 and the Nasdaq Composite advanced 0.43%.
Despite Friday's gains, the weekly performance painted a bleaker picture. Persistent tensions in the Middle East kept oil prices elevated throughout the week, while worries over the U.S. government's massive fiscal deficit and the potential return of inflation pushed long-term Treasury yields sharply higher. These factors weighed heavily on equities, with technology stocks facing particular valuation pressure. As a result, all three major indices posted weekly losses: the S&P 500 fell 1.43%, the Nasdaq dropped 2.05% — snapping their three-week winning streaks — and the Dow declined 0.85%.
Across the Atlantic, European markets closed the week on a positive note. Fresh data showed that eurozone economic activity unexpectedly improved in August, with the manufacturing sector delivering an especially strong performance that drove the overall figures past expectations. The better-than-anticipated business activity numbers lifted all three major European indices on Friday. London's FTSE 100 rose 0.64%, France's CAC 40 gained 0.37%, and Germany's DAX advanced 0.59%.
The latest flash PMI readings from S&P Global revealed that the eurozone composite PMI climbed to 52.1 in August, marking a nine-month high and surpassing market forecasts. Manufacturing proved to be the core driver of the bloc's economic momentum, with the sector's PMI surging to 52.8 — its fastest expansion pace in more than four years. However, beneath the encouraging headline numbers, divergence emerged between the region's two largest economies: Germany recorded modest expansion, while France saw its activity contract further. With inflation in the eurozone still running notably above the European Central Bank's target, the path for future monetary policy remains clouded with uncertainty.
In the oil markets, Friday marked the sixth straight day of gains for crude prices. The U.S. government's announcement the previous day of plans to intensify economic pressure on Iran kept supply concerns front and center, with traders closely monitoring the situation around Iranian exports and the Strait of Hormuz. Light sweet crude for October delivery on the New York Mercantile Exchange edged up 0.26%, while Brent crude for October delivery gained 0.65%. For the week, oil prices rallied sharply as U.S.-Iran negotiations hit another impasse: WTI futures posted a cumulative gain of 5.66%, while Brent futures surged 6.63%.
Precious metals also closed the week with impressive gains. Buoyed by a weaker dollar and escalating safe-haven demand, both gold and silver advanced on Friday. Gold futures for December delivery settled at $4,680.60 per ounce, up 2.39%, while silver futures for September delivery closed at $69.530 per ounce, rising 2.09%. On a weekly basis, gold futures climbed 5.48%, while silver futures posted a robust 6.79% gain.
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