Stocks rise, dollar dips with focus on labor market, US government reopening

By Sinéad Carew and Amanda Cooper

NEW YORK/LONDON (Reuters) -MSCI's global equities index rose modestly on Tuesday as investors looked forward to an end to the U.S. government shutdown, while the dollar dipped on concerns about U.S. labor market weakness.

The U.S. Senate passed a deal on Monday to restore federal funding after a record-long shutdown that has disrupted food benefits for millions, left hundreds of thousands of federal workers unpaid, snarled air traffic, and delayed the release of government economic data.

The deal still needs approval in the House of Representatives, where Speaker Mike Johnson has said he wants a vote as soon as Wednesday. It will then go to U.S. President Donald Trump to be signed into law.

Wall Street had a muted start to Tuesday's session, after a sharp rally on Monday, but gathered steam as the day wore on. The heavyweight Roundhill Magnificent Seven ETF edged lower as investors stepped back from some companies that have benefited from interest in AI technology. It pared earlier losses but Nvidia remained the biggest drag on the S&P 500, closing down almost 3% after Japan's SoftBank Group said it had sold its entire stake in the AI chip leader in October.

"In the morning, there was negative sentiment around either jobs or the SoftBank sale," said Chris Zaccarelli, chief investment officer of Northlight Asset Management in Charlotte, North Carolina. However, he noted that the market regained ground as investors bet that the economy was still solid.

"People are going in and buying the dip because if we don't go into a recession, then this bull market's going to continue," he said.

On Wall Street, the Dow Jones Industrial Average rose 559.33 points, or 1.18%, to 47,927.96, marking a record closing high. The S&P 500 rose 14.19 points, or 0.21%, to 6,846.62 and the Nasdaq Composite fell 58.87 points, or 0.25%, to 23,468.30.

MSCI's gauge of stocks across the globe  rose 4.15 points, or 0.41%, to 1,009.12.

Earlier, the pan-European STOXX 600 index closed up 1.28%, while Europe's broad FTSEurofirst 300 index finished up 1.31%.

The U.S. Treasury market was closed for Veterans Day.

In currencies, the U.S. dollar weakened against the euro and yen on concerns about a deteriorating U.S. labor market after an ADP report showed private employers shed an average of 11,250 jobs a week in the four weeks ended October 25.

After the private sector jobs data, traders were pricing in a 67.4% probability that the Federal Reserve would cut rates by 25 basis points in December, up from 62.4% on Monday, according to CME Group's FedWatch tool. 

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.19% to 99.45, with the euro up 0.23% at $1.1583.

Against the Japanese yen, the dollar weakened 0.01% to 154.12.

In cryptocurrencies, bitcoin fell 2.70% to $102,759.31. 

In the energy markets, oil prices rose around $1 on the impact of the latest U.S. sanctions on Russian oil and optimism around the potential reopening of the U.S. government, although oversupply concerns limited gains.

U.S. crude settled up 1.5%, or 91 cents, at $61.04 a barrel while Brent settled at $65.16 per barrel, up 1.72% or $1.10 on the day.

In precious metals, gold prices rose slightly after hitting a nearly three-week high, bolstered by expectations the U.S. government would reopen and resume releases of economic data that could potentially set the stage for the Federal Reserve to trim interest rates next month.

Spot gold rose 0.31% to $4,128.56 an ounce. U.S. gold futures rose 0.28% to $4,123.50 an ounce.

(Reporting by Sinéad Carew in New York, Amanda Cooper in London, Tom Westbrook in Singapore; Editing by Alex Richardson, Mark Potter, Richard Chang and Edmund Klamann)