Global equities climbed on Monday, Sept. 8, 2025, as weak U.S. jobs figures over the prior week bolstered expectations of a Federal Reserve interest-rate reduction in September. Traders priced a 25 basis-point cut as the most likely outcome, while political shocks from Japan to France, Argentina and Indonesia kept investors wary and pushed safe-haven flows. Key benchmarks and currencies moved modestly: S&P 500 futures rose, European and Asian shares advanced, and longer-dated sovereign yields eased. The mix of monetary-policy easing expectations and cross-border political uncertainty set the tone for a data- and event-heavy week.
Key Takeaways
- U.S. equity futures rose about 0.2%, leaving the S&P 500 set to test recent intraday highs after last week’s soft payrolls report.
- European shares climbed roughly 0.3% and Asian stocks about 0.6% on Monday, while Japan’s Nikkei advanced 1.8% after Prime Minister Shigeru Ishiba resigned.
- Markets are pricing a 25 basis-point Fed cut in September, with a small probability of a 50 basis-point move following weaker employment data.
- Benchmark U.S. Treasury yields were lower: the 10-year at about 4.07% and the two-year near 3.49% as rate-sensitive assets steadied.
- The dollar softened to a six-week low against a currency basket after the jobs release but remained sensitive to political volatility; the euro traded around $1.1731 and the yen near 147 per dollar.
- Gold hit a record high near $3,622 an ounce, up about 37% year-to-date after a 27% rise in 2024; oil prices jumped more than 2% after OPEC+ agreed to slower output increases from October.
Background
The immediate market pivot traces to last week’s U.S. employment report, which came in weaker than investors had expected and rekindled hopes that the Fed will move to ease policy. A softer jobs print reduces near-term pressure on inflation and strengthens the case for a 25 basis-point cut at the Fed’s September meeting, though officials have warned they will react to incoming data such as Wednesday’s U.S. CPI release. Central banks globally are navigating a narrow path between cooling inflation and fragile growth, making each data point and policy signal disproportionately influential.
Political developments amplified market sensitivity. In Tokyo, Prime Minister Shigeru Ishiba’s resignation spurred a sharp intraday reaction: the yen weakened and equities rallied amid betting that his departure reduces the likelihood of near-term BOJ tightening. In Paris, Francois Bayrou faces a confidence vote that he is expected to lose, raising the prospect of a fifth French prime minister in three years and leaving questions over whether President Emmanuel Macron will try to form another government or call new elections. Those domestic political risks complicate investor assessments of fiscal and monetary trajectories in major economies.
Main Event
On Monday, trading reflected a rare convergence of monetary-policy repricing and geopolitical uncertainty. S&P 500 futures were up roughly 0.2%, European indices gained about 0.3% and Asian markets rose approximately 0.6%, with Japan’s Nikkei up 1.8% after news of Ishiba’s resignation. Traders interpreted the political turnover in Tokyo as tilting BOJ policy expectations toward greater patience, while attention in Europe focused on the potential fallout from a lost confidence vote in France.
U.S. Treasury yields, which had tumbled sharply on Friday, were steadier on Monday: the 10-year at about 4.07% and the two-year around 3.49%. The dollar remained under pressure relative to a broad basket after the jobs data hit, but currency moves were uneven — the euro was roughly 0.1% higher at $1.1731 while the yen weakened about 0.3% to near 147 versus the dollar.
Commodities reflected divergent dynamics. Gold surged to a fresh peak near $3,622 an ounce as investors sought inflation hedges and lower real rates, extending a 37% year-to-date gain following a 27% rise in 2024. Oil prices also climbed more than 2% after OPEC+ said it would slow the pace of production increases from October, a move traders viewed as supportive amid concerns about weakening demand.
Analysis & Implications
Financial markets are currently balancing two cross-currents: easing policy expectations in the United States and elevated political uncertainty in several key economies. If the Fed does cut by 25 basis points later this month, it could lower borrowing costs and support risk assets in the near term, but any signs that employment or inflation reaccelerate would reverse those moves quickly. Wednesday’s U.S. CPI print is therefore pivotal; a hotter-than-expected reading would reduce the odds of a larger or earlier easing and could steepen the reversal of risky assets.
Political volatility in Japan and France — and setbacks in Argentina and Indonesia — increase the chance of localized market stress. In Japan, a government seen as more tolerant of looser fiscal or monetary settings could keep the yen weak, supporting exporters but complicating import-price inflation. In France, the prospect of fresh elections or another short-lived administration could lengthen policy uncertainty and weigh on sovereign spreads, especially with several credit-rating reviews pending for French debt.
Emerging markets face asymmetric risks. Argentina’s poor electoral results in Buenos Aires province and Indonesia’s cabinet shake-up (the removal of finance minister Sri Mulyani Indrawati) have already pressured local assets. Weaker global demand expectations and tighter funding conditions in episodes of risk-off could amplify those stresses, particularly for countries with elevated fiscal or external vulnerabilities. Conversely, a confirmed, steady path to Fed easing would likely ease dollar funding strains and provide relief to highly dollarized markets.
Comparison & Data
| Series | Move (Mon) | Level/Note |
|---|---|---|
| S&P 500 futures | +0.2% | Approaching recent intraday highs |
| European shares (.STOXX) | +0.3% | Euro zone indices slightly outperforming |
| Asian shares | +0.6% | Nikkei +1.8% after PM resignation |
| 10-year U.S. yield | – | ~4.07% |
| 2-year U.S. yield | – | ~3.49% |
| Dollar (broad) | ↓ | Six-week low after jobs release |
| Gold | ↑ | Record near $3,622/oz |
| Oil (Brent/WTI) | +>2% | OPEC+ slower output rise from Oct |
The table summarizes intraday moves and key levels that shaped trading. Markets were sensitive to both macro data and political developments; the coming five trading days — featuring U.S. CPI on Wednesday and the ECB meeting on Thursday — will likely determine whether the recent pattern of risk-on after soft data persists.
Reactions & Quotes
“This has opened the door for the dollar to weaken again,”
Paul Mackel, Global Head of FX Research, HSBC
HSBC noted that the jobs numbers raised questions about whether U.S. employment is shifting from cooling toward deterioration, a view that underpins current Fed-cut odds. Market strategists pointed out that political noise around the yen and euro could limit dollar losses even as rate-cut expectations grow.
“OPEC+ agreed to slow the pace of output increases from October,”
OPEC+ communique
That OPEC+ decision was quickly priced by energy traders as supportive for crude in the near term, contributing to a more than 2% rise in both Brent and U.S. crude benchmarks on Monday.
Unconfirmed
- Whether Liberal Democratic Party veteran Sanae Takaichi will emerge as Ishiba’s successor — reports link her to looser fiscal and monetary policies, but no formal selection had been announced as of Sept. 8.
- Whether President Emmanuel Macron would call new parliamentary elections if Francois Bayrou loses the confidence vote — plans remain speculative until the vote outcome and subsequent presidential decisions are clear.
Bottom Line
Markets have reacted to a window of opportunity for policy easing in the United States while simultaneously pricing in the costs of heightened political uncertainty in several key countries. The interplay of weak payrolls, an imminent CPI reading (Wednesday) and the Fed meeting creates asymmetric risk: data that confirms cooling will likely extend the rally, while hotter-than-expected inflation would quickly reverse it. Policymakers and investors will also watch political outcomes in Japan and France for clues to domestic policy direction and potential spillovers.
For now, the outlook is conditional: a modest Fed rate cut would probably support global risk appetite and reduce financing strains, but political shocks and central-bank caution could cap gains. Market participants should prioritize incoming U.S. data this week, track government formation developments in Tokyo and Paris, and monitor OPEC+ supply guidance as key near-term risk drivers.
Sources
- Reuters (news report)
- Federal Reserve (official: policy calendar & statements)
- OPEC (official communiqués)
- Bank of Japan (official)