- US indices are rising, even as the market continues to grapple with risks stemming from the potential US government shutdown. Investors, however, seem to believe that any fiscal turbulence will not derail the upward momentum, despite rising odds of prolonged shutdown (Kalshi prices in even 15 days long shutdown)
- The best performer in the US is the small-cap Russell 2000 index, but the rally is broad-based, with the S&P 500 and Nasdaq 100 also leading gains. Markets welcomed the prospect of faster interest rate cuts in the US; BofA Research noted that it now expects cuts in October, compared to its earlier forecast for September.
- Among individual US stocks, Palantir stood out negatively, with shares falling around 5% following reports of prototype issues that raised concerns among investors. Meanwhile, Freeport-McMoRan gained on the back of an upgraded rating from UBS, and Rare Earth USA extended its impressive run, up more than 100% year-to-date.
- In Europe, most equity markets also moved higher. The UK’s FTSE 100 hit a new all-time high, though not all markets shared the same momentum—Germany’s DAX slipped about 0.3%. On the currency front, both the US dollar and Japanese yen weakened noticeably, while the British pound fared better.
- From China came signals of readiness to undertake massive investments in the US. The proposal could be part of a broader agreement that would see Washington ease certain trade restrictions on Chinese businesses.
- US ISM services data came in below analysts’ expectations. Even so, most components remained above the neutral 50 threshold, giving investors hope for a soft economic landing, fueling speculation of faster rate cuts, and supporting the euro-dollar. The headline index fell to 50 from forecasts of 51.4 and the previous reading of 52. New orders dropped sharply, employment ticked slightly above expectations, while the prices index rose to 69.4 from 69.2 in August.
- Conditions looked worse in the Eurozone’s manufacturing sector, where PMI readings disappointed. The declines were deeper than forecast, signalling further weakness in industrial output.
- On commodities markets, copper surged more than 2%, with investors seeing it as a sign of improving demand prospects. The metal is now trading close to all-time highs. Precious metals also extended their rally, with another strong session: platinum and silver both gained around 2%, while gold is testing the $3,900/oz mark.
- In contrast, cocoa tumbled more than 4%, as supply pressure dominated trading, triggering another sharp sell-off at the start of the new harvest season in West Africa. Meanwhile, coffee prices rose about 2%.
- The positive sentiment also extended to cryptocurrencies, where investors once again increased their exposure to digital assets. Binance Coin led the way with a gain of over 5%, while Bitcoin advanced 2%, bringing it back within striking distance of its all-time high.
Daily summary: Wall Street and gold rebound šOIL gains 3.5%
STMicroelectronics shares down 14% amid mixed future outlookš
US100 gains 0.5% šKansas City Fed Index above estimates
NATGAS loses after the EIA inventories report
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