Global stocks eye best week since May ahead of key jobs data

Global equities were on course Friday for their strongest weekly gain since May, buoyed by robust corporate earnings fueled by artificial intelligence investment, even as investors braced for a pivotal U.S. jobs report and monitored escalating tensions in the Middle East.

Markets Rally on Earnings Strength

MSCI's All-World index rose roughly 2.3 to 2.4 percent for the week, its best performance in three months, according to Reuters. In Europe, the STOXX 600 gained on Friday and was up around 1.6 to 2 percent for the week, led by technology and healthcare stocks. London's FTSE 100, Paris's CAC 40, and Frankfurt's DAX all advanced on Friday.theglobeandmail+3

Cloudflare ↗ 5.57% surged 16 percent in premarket trading Friday after jumping 18 percent in after-hours trading Thursday on stronger-than-expected revenue guidance, reflecting continued investor confidence in AI-related firms. Roughly 85 percent of S&P 500 companies have reported quarterly results, with overall earnings growth shaping up to be the strongest since 2021.marketscreener+1

Jobs Report Looms Large for Fed Policy

The July U.S. nonfarm payrolls report dominated investor attention Friday. Economists forecast a gain of around 80,000 jobs after 57,000 were added in June, with unemployment expected to hold at 4.2 percent.theglobeandmail+1

Money markets showed traders evenly split on whether the Federal Reserve will raise rates next month, making the data especially consequential. "With yields and inflation still the key risks for stocks, we expect Friday's NFP to trade as a 'good news is bad news' print," said Michael Feroli, chief U.S. economist at JPMorgan ↗ 0.34%, noting a strong number would reinforce higher-for-longer rate expectations.marketscreener

Fed Chair Kevin Warsh's reluctance to offer forward guidance has amplified uncertainty. "Vacuums must be filled by whatever is available and the market was always going to pick itself as the solution, and I suspect the practical impact of that will be a broad increase in volatility," said Caxton strategist David Stritch.theglobeandmail+1

Middle East Tensions and Oil

Brent crude traded around $82–$83 a barrel Friday after Yemen's Houthi forces attacked Saudi Arabia and Riyadh warned of imminent coordinated strikes by Iran-backed militias. Iran is reviewing legislation that would bar U.S. and Israeli vessels from the Strait of Hormuz, through which roughly a fifth of global oil passes.bssnews+3

Gold extended its rally, rising more than 6 percent for the week — its strongest weekly showing since January — as investors sought safe-haven assets amid rate uncertainty and geopolitical risk.marketscreener+1