Daily Market Analysis from ForexMart

IT giants on the rise: how Microsoft and Intel changed the picture against the backdrop of a stable S&P 500

Stock market froze in anticipation: investors prepare for the Fed's steps
US stock indices ended trading on Tuesday almost at the same level, giving up the previously reached heights that had earlier allowed the S&P 500 and the Dow Jones Industrial Average to update their historical maximums. The reason for such caution was the expectation of the first interest rate cut by the Federal Reserve in 4.5 years.

S&P 500 rise and fresh economic data
During the trading session, the S&P 500 index briefly rose to 5670.81, which was facilitated by fresh data on the US economy. The data allayed fears of a sharp slowdown in the country's economy.

The Commerce Department reported that retail sales unexpectedly increased in August, despite a decline in auto dealership revenue. That decline was more than offset by a surge in online sales, which helped the economy remain stable for much of the third quarter.

The economy is growing, but not very fast
Russell Price, chief economist at Ameriprise Financial Services in Troy, Michigan, said expectations for the economy were fairly optimistic even before the latest data were released. He said the economy is growing, but growth remains relatively slow.

"Today's economic data confirms that we are in an expansionary environment, although it is not as fast as we would like," Price said.

Fears about inflation and the Fed's actions
Price added that the upcoming rate cut could have a dual effect. It will either increase inflation fears or raise new questions about whether the Fed's measures are fast and decisive enough to prevent a recession.

"Today's trading session shows a move away from historical highs, as tomorrow may bring disappointment for some investors," the expert concluded.

This day showed that the markets are in a state of anticipation: all attention is focused on the Federal Reserve's further actions and their possible impact on the US economy.

Mild changes, big expectations: Dow Jones slightly down, S&P and Nasdaq up
Trading on US stock exchanges on Tuesday ended with minimal changes: the Dow Jones Industrial Average index fell by 15.90 points (0.04%) to 41,606.18, and the S&P 500 rose by 1.49 points (0.03%) and reached 5,634.58. Meanwhile, the Nasdaq Composite added 35.93 points, or 0.20%, to close at 17,628.06.

Investors are keeping a close eye on the Fed's decision
According to CME's FedWatch tool, the odds of the Federal Reserve cutting interest rates by 50 basis points after its two-day meeting on Wednesday are now priced at 65% by the market. Just a week ago, the odds were just 34%, reflecting investor expectations fluctuating amid economic uncertainty.

Microsoft Strengthens Its Position
One of the key drivers of the S&P 500's gains was Microsoft's 0.88% gain in shares. The tech giant emerged victorious after its board approved a $60 billion share buyback program and raised its quarterly dividend by 10%. Such moves have bolstered investor confidence in the stability and future success of the AI leader.

Blue Chips and Russell 2000 in Focus
The Dow Jones, despite a slight decline, continued to surprise, with the index hitting intraday record highs for two days in a row. Meanwhile, the Russell 2000 index, which tracks small-cap companies, was the best performer among the major indices, gaining 0.74% for the session. The gain can be attributed to investors' expectations that the Federal Reserve's rate cut will favor smaller companies.

Energy Leads, Healthcare Stumbles
The energy sector of the S&P 500 was the best performer among the 11 major sectors, gaining 1.41%. This happened against the backdrop of rising oil prices, which spurred oil stocks. At the same time, health care was the day's loser, falling 1.01%, becoming the weakest sector in the index. Investors continue to watch equity markets cautiously as they weigh the chances of further Federal Reserve action and its possible impact on economic growth prospects.

Intel Strengthens Its Positions, Amazon Supports Growth
One of the key events on the stock market on Tuesday was the rise of Intel shares by 2.68%. This growth was due to the conclusion of an agreement with Amazon Web Services, a division of Amazon's cloud services, which became an Intel client for the production of individual chips used in the development of artificial intelligence. Amazon shares also showed positive dynamics, adding 1.08%.

The market is generally positive
Data on the results of trading on the New York Stock Exchange and Nasdaq showed that the number of shares that rose in price exceeded the number of shares that fell in price. On the NYSE, this ratio was 1.55 to 1, and on Nasdaq - 1.25 to 1. This indicates the prevalence of positive sentiment among investors.

New Highs on the Back of Stable Trading Volume
The S&P 500 index showed 48 new 52-week highs, while not a single new low was recorded. The Nasdaq Composite saw more significant changes, with 147 new highs and 68 new lows. Total volume on U.S. exchanges was 10.23 billion shares, slightly below the 20-day average of 10.74 billion.

Labor Market Impact and Fed Rate Outlook
The labor market slowdown seen over the summer, as well as recent media reports, have raised expectations that the Federal Reserve will take more decisive action at its meeting on Wednesday. In particular, a 0.5% rate cut is looking increasingly likely as the Fed seeks to avoid weakening the economy.

Economic Data Suggests Caution
Meanwhile, the latest U.S. economic data showed that retail sales increased in August and factory activity began to recover again. These stronger numbers may ease the pressure for an aggressive rate cut, but the market is still looking for decisive action from the Fed.

Stock markets remain tense as investors weigh the impact of positive economic data on the Fed's likely actions to maintain economic stability.

Economy on the rise: Fed on the cusp of a major decision
"The current data points to a healthy economy," said Peter Cardillo, chief economist at Spartan Capital Securities. He expects Fed Chairman Jerome Powell to decide on a 25 basis point cut at his meeting on Wednesday. However, the Fed's next steps will depend on how the economy evolves, which Powell is likely to hint at in his speech.

Cautious steps or more aggressive policy?
Cardillo noted that the Fed may consider a more aggressive approach at future meetings, but will proceed with caution for now. "They will start with small steps, but they may take more decisive measures as they go along," the expert added.

Traders place bets on the Fed's decision
As they await the Fed's decision, markets continue to make predictions. According to CME Group's FedWatch tool, traders are pricing in a 63% chance that the Fed will cut rates by 50 basis points and a 37% chance that it will cut by 25 basis points.

Global indices and the dollar are stable
The MSCI All-World Index, which tracks global markets, showed a modest gain of 0.04%, reaching 828.72, reflecting stable sentiment in global stock markets ahead of the Fed's key decisions.

Meanwhile, the dollar strengthened against its major counterparts, rising 0.28% to 100.98 in a basket of currencies. The dollar also showed solid gains against the Japanese yen, rising 1.19% to 142.29.

Focus on the Bank of England and the Bank of Japan
It's not just the Fed that has investors' attention this week. The Bank of England and the Bank of Japan are also scheduled to meet to discuss their monetary policy. However, unlike the Fed, these regulators are expected to keep interest rates at current levels.

Disappointment is inevitable?
Russell Price, chief economist at Ameriprise Financial Services, commented on the current market sentiment. "Today's trading shows that we are on the brink of a major decision. Tomorrow, some investors are likely to face disappointment," Price said.

All eyes are on tomorrow's Fed meeting, which could set the tone for future economic developments both in the U.S. and globally.

U.S. Treasury yields rise
The yield on two-year U.S. Treasuries, a gauge of short-term interest rate expectations, rose 4.4 basis points to 3.5986%, after falling to a two-year low of 3.528% in the previous session. The 10-year yield also rose, rising 2.3 basis points to 3.644%, up from 3.621% late Monday.

China's economy remains a concern
Asian markets were weighed down by China's fragile economic recovery. The latest data released over the weekend showed industrial output growth slowed to a five-month low in August, while retail sales and new home prices continued to decline, adding uncertainty to the recovery picture in the region's largest economy.

Oil prices rise amid hurricane
Oil prices rose as the industry continues to analyze the impact of Hurricane Francine, which has affected oil production in the US Gulf of Mexico. US crude oil rose 1.57% to $71.19 per barrel. Brent crude ended the day at $73.7 per barrel, up 1.31%. The gains were due to uncertainty surrounding the recovery of oil production in the region following the natural disaster.

Gold slips after record gains
Despite spot gold hitting a record high on Monday, prices corrected lower on Tuesday. Gold fell 0.51% to $2,569.51 per ounce. The decline followed a strong rally earlier in the week, but gold remains an important indicator of market sentiment, reflecting demand for safe havens amid global uncertainty. Economic dynamics around the world, including the US and China, continue to impact markets, causing swings in bond yields, oil and gold prices.
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Surprise Reversal: Fed Cuts Rates, Markets Fall, Indexes Lose Ground

Volatile Trading Ends Down
US stock indexes closed with minor losses on Wednesday after the Federal Reserve unexpectedly cut interest rates by 50 basis points, the upper limit of expectations for the first rate change in four years. Investors were expecting the Fed's move, but their reactions to the decision were mixed.

Short-Term Market Fluctuations
The trading session was jittery. The S&P 500 had been moving up and down, showing little change, before the Fed's decision. After the rate cut was announced, the index rose 1%, but then weakened again and closed with losses. The Dow Jones index saw similar swings, reaching an intraday high, but then, like the S&P 500, ending the day lower.

The Fed is betting on inflation and the labor market
The Federal Reserve justified its decision by citing "high confidence" that inflation is moving toward its 2% target. The Fed's policy focus now is on maintaining the resilience of the labor market, which remains the focus of economists. The half-percentage-point rate cut was a key step in that direction.

"The Fed has signaled that they are serious about cutting rates by 50 basis points and will likely continue to do so through the end of the year," said Brian Jacobsen, chief economist at Annex Wealth Management in Wisconsin. In his opinion, such a move indicates the Fed's intention to stabilize the unemployment rate at 4.4% and return inflation to target levels.

Market expectations: from 25 to 50 basis points
Over the past few days, markets have been unable to decide on the forecasts for the size of the rate cut. According to the FedWatch tool from CME, the probability of a 25 basis point cut was estimated at 65% last week. However, by the time the Fed's decision was announced on Wednesday, the probability of a larger 50 basis point cut had already reached 57%.

Minor losses amid expectations of rate cuts
US stock indices ended trading in the red. The Dow Jones Industrial Average fell by 103.08 points, which amounted to 0.25%, ending the day at 41,503.10. The S&P 500 lost 16.32 points, or 0.29%, to close at 5,618.26. The Nasdaq Composite also lost ground, losing 54.76 points, or 0.31%, to 17,573.30.

Markets Betting on More Rate Cuts
Investors in the market are already bracing for the Federal Reserve to cut rates by at least 25 basis points at its November meeting. In fact, analysts are predicting a 35% chance that the Fed could cut rates by as much as 50 basis points.

Markets Hunger for More
"What amazes me is that even when markets get what they think they want, their appetites continue to grow," said Steve Sosnick, chief market strategist at Interactive Brokers in Connecticut. He points out that despite expectations, stocks are not showing significant growth after the news, which may be due to the fact that the good news is already partially priced in after the previous seven-day rally.

Historically high borrowing costs
Recall that the cost of borrowing in the US has reached record levels in the last two decades, starting in July 2023, when the Federal Reserve raised interest rates by 25 basis points to a range of 5.25% to 5.50% to combat inflation. This was the latest increase in a series of Fed decisions aimed at slowing inflationary pressures.

Fed Chairman's statement: No urgency to act
After the latest rate cut, Fed Chairman Jerome Powell noted that there is no immediate need for urgent action. This statement indicates a more cautious approach to further changes in monetary policy, which signals a stabilization of the pace of rate cuts.

Small Caps Take the Lead
Small-cap stocks, traditional winners in a low-interest-rate environment, showed solid gains. The Russell 2000 index, which tracks such stocks, rose 2.44% on the day, though it ended the day with a modest gain of 0.04%. That performance allowed it to outperform the larger-cap indices.

Regional banks gain strength
Regional banks, which have been under pressure from high interest rates in recent times, have also shown a recovery. The KBW index, which tracks their activity, jumped 3.53% during trading and ended the session with a gain of 0.46%. This growth shows that banks are adapting to changing market conditions.

Records as the economy stabilizes
Stock markets have shown significant gains in 2023, with all three key indices reaching record highs. Lower inflation and signs of a cooling labor market have inspired confidence that the period of high interest rates may gradually end, supporting optimism among investors.

Intuitive Machines shares soar 38% after NASA contract
One of the market's top gainers was Intuitive Machines, which rose an impressive 38.3%. The jump came after the announcement of a $4.8 billion contract with NASA to provide navigation services for space missions, boosting investor interest.

Market Balance: Stocks Advancing Outperform
On the New York Stock Exchange (NYSE), advancers outpaced decliners by a 1.14-to-1 ratio, while on the Nasdaq the ratio was 1.36-to-1, showing that positive sentiment remains despite volatility.

Record Performances for the S&P 500 and Nasdaq
The S&P 500 has posted 43 new highs over the past 52 weeks and no new lows. The Nasdaq Composite has been even more impressive, with 165 new highs and 69 new lows, underscoring investor confidence in the upside.

Trading volume exceeded average
Trading activity on US exchanges was also above average. The volume of transactions amounted to 11.63 billion shares, which is higher than the average of 10.82 billion shares over the past 20 trading days.

Unexpected rate cut
The US central bank went for a more significant cut in the overnight rate than expected, reducing it by 0.5%, as opposed to the traditional 0.25%. This decision is based on the regulator's confidence that inflation will continue to move towards the target level of 2%. The new rate, which determines how much banks pay each other for short-term loans, is now in the range of 4.75%-5.00%, which is in line with market expectations.

Stock market reaction: short-term growth
After the Federal Reserve's announcement, the S&P 500 index initially rose by 1%, but then lost momentum and ended the day 0.29% lower, stopping at 5618.26. The move shows that despite investors' positive expectations, the market is not ready for a sharp rally.

Seven-day rally — the effect has been priced in
"While markets got what they wanted, stocks have yet to see a significant rally. After seven straight days of gains, a lot of the positive news has already been priced in," said Steve Sosnick, chief market strategist at Interactive Brokers. His comment underscores the sentiment among market participants who may have expected more from the rate cuts.

Record rates amid slowing inflation
The overnight rate was at its highest since July 2023, when the Fed continued to fight inflation with rate hikes. That made borrowing costs the highest in two decades, putting pressure on both consumers and businesses.

Global markets also felt pressure
The MSCI World Equity Index hit a new high during the session but was unable to hold on, falling 0.29% to 826.29, reflecting the global reaction to the Fed's move and uncertainty about where markets are headed.

The dollar rose slightly after weakening
The dollar index, which tracks the value of the US currency against major global currencies such as the yen and euro, initially weakened on the news of the rate cut. However, it later strengthened slightly, rising 0.07% to 100.98, reflecting volatility in currency markets and investors' eagerness to adapt to the new monetary policy.

Investors await further developments
While the Federal Reserve's actions were in line with expectations for many market participants, the reaction to the rate cut was muted, indicating that investors are still weighing the longer-term implications and potential future moves by the regulator.
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Financial Breakout: S&P 500, Dow Climb to All-Time Highs After Fed Rate Cut

Stock Markets Hit Records After Fed Decision: S&P 500, Dow Jones at All-Time Highs
The S&P 500 Index shot to record highs on Thursday, closing at new highs just after the Federal Reserve announced a 50 basis point rate cut and hinted at more steps to come.

Record rise of Dow Jones
The Dow Jones Industrial Average also pleased investors, closing the session at an all-time high, exceeding the 42,000 mark. Such a result was recorded for the first time in its long history.

Market leaders continue to grow
Large companies that dominated the stock market during the year once again strengthened their positions. Thus, Tesla (TSLA.O) shares rose by more than 7%, while Apple (AAPL.O) and Meta Platforms (banned in Russia) each added almost 4%.

Nvidia and semiconductors on the rise
Nvidia's (NVDA.O) success on the back of technological advances in the field of artificial intelligence led to a 4% rise in the company's shares. This contributed to a 4.3% increase in the PHLX semiconductor index (.SOX), strengthening the overall dynamics in the sector.

Optimism on Economic Data
An additional driver for the stock market was more optimistic jobless claims data, which exceeded analysts' expectations and increased global interest in risk assets.

Fed comments boost investor confidence
The Federal Reserve announced a rate cut on Wednesday, beating market expectations. At the same time, Fed Chairman Jerome Powell expressed confidence that inflation is under control. He noted that the U.S. economy continues to demonstrate resilience, and the central bank will adjust the pace of further policy easing depending on economic data.

"The Fed has given a fairly strong picture of the economy, and this has led to an influx of capital into sectors that have not performed well up until this quarter," said James Ragan, director of wealth management research at D.A. Davidson.

Lower interest rates and the Fed's confident statements about inflation control have boosted investor confidence, leading to record gains in the stock market and gains for large companies.

Small Caps on the Rise: Russell 2000 Gains on Rate Cuts
The Russell 2000 index of small-cap companies posted an impressive gain of 2.1%. Lower interest rates have opened up new opportunities for small-cap companies to cut operating costs and boost profits.

All-time high for the S&P 500
The S&P 500 index rose 1.70% to close at a record 5,713.64, its highest level ever. The Nasdaq also posted a strong gain of 2.51% to close at 18,013.98. The Dow Jones Industrial Average was not far behind, adding 1.26% to close at 42,025.19.

Most S&P 500 Sectors Gain
Of the 11 key S&P 500 sectors, eight ended the session in positive territory. Information technology led the gains, adding 3.08%, followed by consumer staples, which rose 2.2%.

Fedex Loses Ground
Fedex shares fell 10% in the after-hours session. The reason was the company's revision of its revenue forecasts for fiscal 2025, which negatively affected market expectations.

Expectations for a rate cut are growing
BofA Global Research has revised its forecasts and now expects a total of 75 basis points of rate cuts by the end of the year, which is higher than their previous forecast of 50 basis points. This could be a significant factor in future market dynamics.

Data: Historical Gains After Rate Cuts
The S&P 500 has gained an average of 14% in the six months following the first rate cut in a monetary easing cycle, according to Evercore ISI data going back to 1970. This historical data adds to investor optimism ahead of a new round of monetary easing.

September: Traditional Losses for U.S. Stocks
September is a rare month for U.S. stock market investors. On average, the S&P 500 has lost 1.2% in the month since 1928, making it one of the weakest periods for stocks.

Banking Sector in Positive Light
Despite the overall negative trend in September, the S&P 500 banking sector showed a confident increase of 2.5%. The leaders were such financial giants as Citigroup and Bank of America, which managed to show an improvement in results after cutting their base rates.

Progyny Loses Ground
Progyny, a company specializing in services for managing fertility programs, suffered a setback. After one of its major clients announced its intention to terminate the contract within 90 days, the company's shares fell by 33%. This was one of the largest declines of the day.

Rising Dominates the Stock Market
In the S&P 500 index, the number of advancing stocks outnumbered declining ones by two and a half times, which shows strong support from the market. The US stock market as a whole showed even more optimistic dynamics, where advancing stocks outnumbered declining ones by a ratio of 3.8 to one.

Trading Activity is High
Trading volume on U.S. stock exchanges also remained high, reaching 12.3 billion shares, well above the 20-session average of 10.8 billion shares. Such activity indicates continued investor interest in the stock market despite the usual September headwinds.

Small Caps Gain
It wasn't just large companies that benefited from lower interest rates. Small businesses, as represented by the Russell 2000 index, also posted a strong gain of 2.1%. Lower operating costs and cheaper borrowing helped small-cap companies gain ground.

Global Markets Are Also Booming
It wasn't just Wall Street that was seeing gains. The MSCI Global Equity Index, which includes stocks from 47 countries, also added 1.66% to 839.98, reflecting a global appetite for risk and growing optimism in global markets.

Jobless Claims Hits Four-Month Low
The number of new jobless claims in the U.S. came in well short of market expectations last week to Sept. 14, signaling continued recovery in the labor market, with the number of new applicants hitting a four-month low.

Bond Market Reaction: Yields Rise
The decline in jobless claims has led to a selloff in U.S. government bonds, sending yields higher. The yield on the 10-year Treasury note hit a two-week high of 3.768%, up 3.2 basis points to 3.719%, up from 3.687% late Wednesday.

Short-Term Bonds Under Pressure
In contrast, short-term Treasury yields fell amid data showing a drop in home sales. According to the report, existing home sales fell to their lowest since 2023. Following this, the yield on 2-year bonds fell 1.5 basis points to 3.5876% from 3.603% the previous day.

Dollar weakens amid choppy trading
Foreign exchange markets also reacted to the economic data. The dollar weakened amid choppy trading. The dollar index, which tracks the greenback against major global currencies such as the euro and yen, fell 0.41% to 100.61.

European markets remain positive: STOXX 600 rises
In Europe, the market reacted optimistically despite the Bank of England's decision to leave interest rates unchanged. The STOXX 600 index, which covers 600 European companies, added more than 1%. The British pound also strengthened, rising 0.5% to $1.3278, reflecting stable market sentiment in the region.

Economic data continues to weigh heavily on financial markets, with bond yields moving, exchange rates gyrating and optimism in Europe lingering despite central bank decisions.

BoJ braces for possible October rate hike
The busy week of interest rate decisions continues on Friday, with the Bank of Japan in the spotlight. While experts do not expect any drastic moves at this stage, the regulator is expected to surprise markets by raising rates as early as October, which would contrast with the global trend of monetary easing.

Yen continues to weaken
The Japanese yen weakened further against the US dollar, falling 0.21% to 142.57 per dollar, suggesting that Japanese monetary authorities are willing to maintain flexibility amid expectations for interest rate changes.

Gold Shows Confident Growth
Amid global economic uncertainty, gold showed confident dynamics, rising by 1.15% to $2,588.34 per ounce. Investors continue to view gold as a reliable means of protection against economic risks and inflation.

Oil prices rise on expectations of strong demand
Oil prices also showed gains, supported by expectations that lower global interest rates will support demand growth. Brent crude futures broke the $74 per barrel mark for the first time in a week, ending at $74.88, up 1.67% on the day. U.S. crude also strengthened, rising 1.47% to $71.95 per barrel.

Markets are closely watching the decisions of key central banks, with the Bank of Japan becoming one of the focus areas for a possible rate hike. The weakness of the yen, rising oil prices and stronger gold reflect current investor expectations amid these developments.
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Dow surges ahead: How Nike is saving the market amid FedEx decline and Fed signals?

US stocks end the week on a neutral note
US stocks closed almost unchanged on Friday. Investors decided to take a break after the impressive growth of the previous trading day, when a sharp rise in quotes was caused by another rate hike by the US Federal Reserve. However, the dynamics of Nike shares made a positive contribution, helping the Dow index approach new highs.

Moderate growth after August rally
After the indices showed the largest daily gain since mid-August the day before, the main market dynamics were restrained. Despite this, the week ended with a 1% or more increase in quotes for key indices.

The market expects further rate cuts
Investors' hopes for a further rate cut were reinforced by statements from Fed Chairman Christopher Waller. His comments increased expectations that the rate would be cut by 50 basis points at once at the November meeting. This happened against the backdrop of a fresh rate cut on Wednesday, also by 50 basis points.

Different opinions within the Fed
At the same time, Fed member Michelle Bowman noted that she would prefer a more cautious reduction, which caused disagreement in assessments of the regulator's further steps.

Experts advise caution
"The market is in the process of adjusting, as some participants expected a significant reduction, but many were skeptical," said Sid Vaidya, chief wealth strategist at TD Wealth. In his opinion, it is important to act with greater caution now, since economic growth is expected to slow, and high valuations of large companies may be overstated.

Minor Index Fluctuations Amid Rate Expectations
On Friday, the Dow Jones Industrial Average posted a modest gain of 38.17 points (0.09%) to end at 42,063.36. At the same time, the S&P 500 was down slightly by 11.09 points (0.19%) to 5,702.55, and the Nasdaq Composite lost 65.66 points (0.36%) to end the trading session at 17,948.32.

Weekly Summary: All Major Indices Up
Despite a mixed finish to the week, the major indices posted solid gains. The S&P 500 added 1.36%, the Nasdaq rose 1.49%, and the Dow Jones ended the week with a gain of 1.62%.

Rate Cut Expectations: Investors on Guard
According to CME's FedWatch tool, market participants are confident that the Federal Reserve will cut rates by at least 25 basis points at its November meeting. The probability of a larger 50 basis point cut is estimated at almost 49%.

Utilities Lead the Gain
Utilities were the strong performers of the week, rising 2.69% to a new record high, led by Constellation Energy, which jumped 22.29% after it announced a partnership with Microsoft to revive the Three Mile Island nuclear power plant in Pennsylvania.

Intel Keeps the Dow Afloat
The Dow gained additional support as Intel shares rose 3.31%. The rise followed a Wall Street Journal report that Qualcomm might acquire Intel, which prompted a positive reaction from investors.

Fed Easing to Boost Growth
The Federal Reserve began its monetary easing cycle on Wednesday, boosting market confidence. The U.S. economy is expected to continue to grow steadily, with low unemployment and subdued inflation providing a favorable environment for investors.

FedEx Under Pressure After Guidance Revision
FedEx shares (FDX.N) plunged 15.23% after the company cut its full-year revenue forecast. That sent the Dow Jones Transport (.DJT) index sliding 3.53%, its steepest drop since late April 2023.

Nike Strengthens Its Position Amid Executive Changes
Nike (NKE.N) shares soared 6.84% after the company announced that Elliott Hill, its former chief executive, will be returning to replace John Donahoe as CEO. The move sparked investor optimism and helped boost the company's value.

'Triple Witch' Boosts Volume
Friday's session was marked by a so-called "triple witch," when options and futures linked to stock indexes and individual stocks expired simultaneously. This phenomenon is traditionally accompanied by a surge in market activity and was responsible for the heaviest trading volume in 2024.

Stocks in a Rate Cut Environment: An Uncertain Outlook
While historically lower interest rates have been good for stocks, the current situation is worrisome. S&P 500 valuations are well above their long-term averages, raising concerns among analysts about further gains.

Market Balance: Bears Prevail
On the New York Stock Exchange, decliners outnumbered gainers by 1.66 to 1. On the Nasdaq, the ratio was 1.87 to 1 in favor of the bears, indicating a generally negative mood among market participants.

New Highs and Lows
The S&P 500 recorded 32 new yearly highs and one low, while the Nasdaq posted 114 new peaks and 105 new lows in the latest trading session. Trading volume on U.S. exchanges was nearly 20 billion shares, well above the 20-day average of 11.48 billion.

Conflicting Views at the Fed Stir Debate on Inflation
Days after the rate cut, two key U.S. Federal Reserve officials expressed opposing views on the outlook for inflation, underscoring the extent of the debate within the regulator about the need for next steps. While Chairman Jerome Powell insisted the rate cut was made to support robust economic growth, it was not a response to weak employment data.

The market is expecting more rate cuts
Investors are already pricing in the possibility of a 25 basis point rate cut in November. The probability of a larger 50 basis point rate cut is also high, at 48.9%, according to CME FedWatch data. Those expectations are heightened by growing talk of potential economic risks.

Unknown risks worry investors
Michael Matousek, chief trader at U.S. Global Investors, said the latest rate cut has raised concerns among market participants about hidden risks. "Investors are starting to think that they may not be seeing all the threats that are under the surface and are bracing for the unexpected," he said. He also added that the question remains whether the Fed will be able to achieve a "soft landing," or control inflation without triggering a recession, which is also a concern.

Nike Supports Dow Jones Growth
The main driver of the Dow's rise was a jump in Nike shares, which rose after news that Elliott Hill had returned to the company as CEO. The personnel decision had a positive impact on the stock's dynamics and supported the index amid overall market volatility.

Global Stocks Slip
The MSCI World Equity Index slipped 0.21% to 837.69 after hitting a record high on Thursday.

Utilities Lead the Gains
The utilities sector was the best performer in the market, with Constellation Energy shares soaring more than 20%. The main reason for the rise was the news of a partnership with Microsoft that involves reopening a mothballed part of a nuclear power plant to support artificial intelligence projects.

Bank of Japan remains cautious
The Bank of Japan decided to leave interest rates unchanged after an eventful week. This decision coincided with market expectations, but the bank's governor Kazuo Ueda made it clear that a sharp rate hike is not expected in the near future. He also noted that economic uncertainty in the United States and high volatility in global markets could influence the regulator's future decisions.

Yen loses ground amid BOJ statements
After the BOJ meeting, the yen weakened against the US dollar, falling by 0.94% to 143.97 per dollar. The dollar, in turn, strengthened and reached a two-week high against the Japanese currency. The dollar index, which tracks the dollar against a basket of major world currencies, rose by 0.12%, stopping at 100.79.

European shares down on carmakers
European markets also suffered losses, with the STOXX index slipping from two-week highs. Carmakers led the decline after Mercedes-Benz announced a profit target revision, citing weaker demand in China.

China: Stable rates, cautious growth
In China, the central bank left its benchmark lending rates unchanged despite expectations of a cut. Against this backdrop, the key blue-chip index rose 0.2%, but remained near the seven-month low hit earlier this week.

Hopes for stimulus in China grow
A series of weak economic data in recent days has fueled optimism among investors expecting aggressive measures to support the world's second-largest economy. Economic stimulus could have a significant impact on global markets, which is especially important amid the current volatility.

Sterling Recovers from Weakness
The British pound weakened on Thursday after the Bank of England decided to keep interest rates unchanged. However, by Friday the pound had begun to strengthen, rising 0.23% to $1.3314. The currency was supported by positive data on UK retail sales for August, which beat analysts' forecasts.

Commodities Continue to Strengthen
Commodity markets maintained their upward momentum amid global economic changes. Gold hit a record high of $2,614 an ounce, indicating increased demand for safe haven assets amid uncertainty.

Oil Prices Show Weekly Gains
Despite a slight decline on Friday, oil futures ended the week with strong gains. Brent crude fell 0.52% to $74.49 a barrel, while U.S. WTI crude fell 0.4% to $71.92 a barrel. However, both benchmarks are up more than 4% for the week, reflecting robust energy demand.
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XAU/USD. Analysis and Forecast

Today, the price of gold is retreating from a new all-time high around the $2,640

The increase in U.S. Treasury yields is helping to revive demand for U.S. dollars, leading to some profit-taking in gold. This occurs amid mildly overbought conditions observed on the daily chart.

However, any significant corrective decline in the precious metal is expected to be limited due to rising expectations of a more aggressive monetary easing by the Federal Reserve. Additionally, political uncertainty in the U.S., bleak global economic prospects, and ongoing geopolitical risks are expected to continue supporting the safe-haven appeal of gold. Furthermore, traders are awaiting a speech by Federal Reserve Governor Michelle Bowman, which could trigger renewed momentum for this non-interest-bearing asset.

From a technical perspective, the recent breakout and sustainability above the $2,600 level can be seen as a new trigger for bulls. However, the Relative Strength Index (RSI) on the daily chart stands at 70, suggesting some caution. Therefore, it would be prudent to wait for a moderate pullback or a short-term consolidation before positioning for the next upward move.

Any corrective decline is likely to attract new buyers around the psychological level of $2,600, below which the price could drop to the horizontal support zone at $2,560. The next relevant support is located near the breakout level at $2,532, with the key psychological support set at $2,500. A decisive break below this level would shift the short-term bias in favor of the bears, paving the way for a more significant decline.
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Highs on the Horizon: China Stimulus Gives Miners a Boost

Record Gains for S&P 500 and Dow as Mining Stocks Take the Lead
The S&P 500 and Dow both hit new record highs on Tuesday despite weak consumer confidence data. This time, mining stocks helped the market, jumping on the back of massive economic stimulus announced by China.

Report Disappoints, But Markets Remain Afloat
Initially, the indexes gave up some of their gains after the Conference Board released a report that showed an unexpected drop in U.S. consumer confidence for September. The decline was due to growing concerns about the health of the U.S. labor market.

China Boost
"The main reason for today's gains was the news of support for China's stock market, as well as promises of future interest rate cuts. These announcements led to a sharp jump in international equities," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

Hill said Chinese stimulus measures have also weighed on U.S. markets, particularly in sectors that are exposed to the Chinese economy, such as mining and metals, which have seen strong gains.

Daily Roundup: Records Set as Cyclicals Rise
The Dow Jones Industrial Average (DJI) added 83.57 points (0.20%) to end the day at 42,208.22. The S&P 500 (SPX) rose 14.36 points (0.25%) to 5,732.93, while the Nasdaq Composite (IXIC) rose 100.25 points (0.56%) to 18,074.52.

Of the 11 S&P 500 sectors, five ended the day in positive territory, with material stocks posting the biggest gains, up 1.35%.

Metals prices soar as China unveils biggest stimulus since pandemic
Metals prices jumped sharply after China, the world's second-largest economy, announced its biggest economic stimulus since the pandemic, seeking to lift the country out of a deflationary crisis.

Mining stocks on the rise
Amid China's support measures, copper and lithium mining stocks showed notable gains. Freeport-McMoRan shares rose 7.93%, Southern Copper added 7.22%, Albemarle increased 1.97%, and Arcadium Lithium rose 3.2%.

Chinese giants strengthen their positions on US exchanges
Chinese companies listed on US exchanges also showed strong growth. For example, Alibaba jumped 7.88%, PDD Holdings rose 11.79%, and Li Auto gained 11.37%, reflecting positive sentiment in the domestic market.

Tech sector saw mixed results
Tech giants were mixed, with Nvidia rising 3.9% and Microsoft losing 1.15%. However, overall, the tech sector rose 0.79%. The Philadelphia SE semiconductor index rose 1.23%, led by gains in Qualcomm shares of 0.54% and Intel shares of 1.11%.

Fed urges caution as inflation rises
Fed Chair Michelle Bowman warned that inflation remains above the 2% target, calling for a cautious approach to further interest rate cuts.

This week, investors are focused on unemployment and personal consumption spending data, which could influence the Fed's next moves.

Visa Slips Amid Court Case
Among the notable moves in the market, Visa shares fell 5.49% after the U.S. Department of Justice filed a lawsuit against the company for possible antitrust violations. The move put significant pressure on the financial sector, which ended the session down 0.92%.

Stocks Show Solid Gains
Despite the problems in the financial sector, the New York Stock Exchange saw most stocks finish the day higher. For every one that fell, there were nearly two that advanced, a ratio of 1.93 to 1. The NYSE posted 636 new highs and only 43 new lows.

The S&P 500 also showed positive dynamics, with 62 new 52-week highs and no new lows. The Nasdaq Composite posted 103 new highs but also 101 new lows, reflecting a mixed picture in the tech market.

Active Trading on US Exchanges
Total trading volume on US stock markets was 11.42 billion shares, slightly below the average of 11.60 billion over the past 20 sessions. This shows that interest in the market is stable amid global economic changes.

Global Markets and Copper Prices Rise on Chinese Stimulus
A widely followed global stock index hit an all-time high on Tuesday, while copper prices rose to their highest in 10 weeks, driven by economic support measures announced by China, the world's second-largest economy.

Chinese Yuan and Oil Strengthen on Stimulus
The Chinese yuan hit a 16-month high against the US dollar, in response to economic support measures taken by Beijing. Following this, oil prices also rose to a three-week high, reflecting positive expectations in the world's largest crude importer.

New steps from the People's Bank of China
The governor of the People's Bank of China, Pan Gongsheng, announced plans to lower borrowing costs and inject more money into the economy. Particular attention will be paid to reducing the debt burden on households, in particular by reducing mortgage payments. Among the planned measures is a 50 basis point reduction in bank reserve requirements, which should stimulate further economic growth.

News from China boosts growth in US cyclical sectors
China's economic support measures have had a significant impact on US markets. "News signals from China are reflected in US sectors, particularly cyclical sectors such as metals and mining, which have performed impressively," said Zachary Hill, head of portfolio management at Horizon Investments in Charlotte, North Carolina.

Fed under close scrutiny by investors
Investors continue to closely monitor the Federal Reserve's actions, trying to predict its next move after the recent monetary easing, when the key interest rate was cut by 50 basis points.

World indices continue to move up
The MSCI World Equity Index showed confident growth, adding 0.54% and reaching a record high of 844.56 points. The European STOXX 600 index also rose by 0.65%, supporting positive sentiment in global markets.

Oil and metals markets are showing strength
In commodity markets, oil prices continued to rise: US crude oil rose by $1.19, reaching $71.56 per barrel, and Brent crude rose by $1.27 to $75.17 per barrel. This growth was caused by positive economic news from China, the world's largest consumer of raw materials.

Copper also posted a strong gain on the London Metal Exchange, rising 2.7% to $9,802 a tonne. The session peaked at $9,825, the highest since mid-July. China's influence on the metals market was a key factor in the rally.

Gold and Yuan Strengthen
Gold continued to strengthen amid growing interest in safe haven assets, rising 1.15% to $2,658.69 an ounce. Meanwhile, the Chinese yuan strengthened 0.65% against the US dollar to $7.017.

Dollar Weakens on Weak Consumer Confidence
The US dollar index extended its decline after data showed weak consumer confidence, raising expectations for further Fed easing.

Dollar Loses as Euro and Yen Gain
The dollar index, which tracks the dollar against major global currencies such as the yen and euro, fell 0.57% to 100.35. Meanwhile, the euro gained 0.59% to $1.1178. The Japanese yen also gained against the dollar, with the American currency weakening 0.31% to 143.15 yen.

Treasury yields fall as markets react to economic data
Treasury yields fell in choppy trading, as expectations of further interest rate cuts by the Federal Reserve became more likely amid weak economic data and waning consumer confidence.

Rate Futures: New Cut Odds Rising
The odds that the Fed will cut rates by 50 basis points at its November meeting have increased to 62%, up from 54% the day before, according to LSEG. At the same time, a more modest 25 basis point cut has a 38% chance.

US 10-Year Treasury Yields Weaken
The yield on the US 10-year Treasury note eased slightly to 3.733% in afternoon trading after earlier hitting a three-week high of 3.81%. The trend reflects growing market expectations that the Federal Reserve may take additional monetary easing measures in the near future.
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Four reasons to buy Bitcoin

Through hardships to the stars! Bitcoin is enjoying its investment luster again thanks to worldwide monetary policy easing, rising global risk appetite, and hopes for improved crypto regulation in the US. Regardless of who comes to power—Kamala Harris or Donald Trump—digital assets will find support from the future president. This optimism is fueling the BTC/USD rally.

Bitcoin opened in September in a subdued mood. Historically, over the past decade, it has fallen by an average of 5.9% during the first month of autumn. However, there are exceptions to every rule. In 2024, Bitcoin gained about 10%, thanks to the aggressive start of the Federal Reserve's monetary expansion and support from both US presidential candidates. Kamala Harris promises to increase investment in the crypto industry and artificial intelligence, while Donald Trump plans to make America the crypto capital of the world.

Bitcoin's performance in September

The lower the interest rates, the cheaper the money, and the more liquidity there is in the financial system. An increase in the supply of fiat currencies reduces their purchasing power and drives investors to seek alternatives. The best of these are assets whose supply is limited by nature. It's no surprise that gold is hitting historical highs against this backdrop, and Bitcoin has surged to its highest levels since July.

The Federal Reserve has aggressively begun a cycle of monetary easing. The People's Bank of China has launched its largest-scale stimulus since the pandemic. The weakness of the Eurozone's economy is even prompting ECB hawks to consider rate cuts. Widespread monetary policy easing by major central banks creates a favorable environment for risky assets. Moreover, US stocks have surged thanks to the "Goldilocks" scenario—where GDP is slowing but still growing above trend, and inflation is steadily approaching the 2% target.

Meanwhile, the increase in Bitcoin's correlation with US stock indices to the highest levels since 2022 cements investors' intent to buy cryptocurrency. Unlike the S&P 500 and gold, Bitcoin is far from its historical peaks, meaning it doesn't resemble a bubble that could burst at any moment.

S&P 500 and cryptocurrency correlation trends

Thus, the combination of widespread monetary expansion, diminished trust in fiat currencies, growing global risk appetite, and bipartisan support for the crypto industry are giving Bitcoin a green light. But can it seize the opportunity? The answer to this question will largely depend on US stock indices, whose correlation with digital assets is rapidly increasing.

Technically, on the daily BTC/USD chart, a broadening wedge pattern has fully formed. We expect a pullback to the 4-5 wave, after which there will be an opportunity to increase the previously opened long positions at 55,420–55,720, 58,000, and 59,000.
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The main events by the morning: September 30

In 2025, the world's central banks will switch their focus from fighting inflation to stimulating economic growth. With the beginning of the cycle of interest rate cuts in the second half of this year, experts began to express concern about the prospects for economic development. Now central banks will look for new growth points, since the task of containing inflation has been completed. China has already started stimulating its economy last week.

Investors are actively showing interest in the IPO of Arenadata, having re-signed the application book 3-4 times along the upper limit. The company expects to re-sign 4-5 times. Arenadat strives to avoid a repeat of the situation with Diasoft and intends to make the placement more balanced. The auction will begin on October 1.

Russia plans to strengthen responsibility for illegal migration. Three draft laws are being developed: one of them assumes that illegal stay is considered an aggravating circumstance when committing offenses, the other introduces fines for forgery of migration documents in the amount of 5-10 million rubles, and the third provides for punishment for organizing illegal migration.

The United States has allocated $567 million in military assistance to Taiwan, including for the supply of weapons, training and training in the military sphere. In 2023, the United States provided $345 million in military aid to Taiwan. China considers Taiwan its territory and has repeatedly criticized the American authorities for its support.
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Indexes in the green, oil in the red: What's behind the market paradox?

Powell warns of caution
The S&P 500 unexpectedly soared to record highs on Monday, after earlier being under pressure due to comments from Federal Reserve Chairman Jerome Powell. He signaled that the Fed will not rush into another rate cut, despite market expectations.

The index was supported by positive sentiment, as well as strong monthly and quarterly results. As a result, all three key US indices — the Dow, S&P 500 and Nasdaq — closed the session in the "green zone", updating their historical maximums.

Important signals for the market
Speaking at the National Economic Association conference in Nashville, Powell indicated that the regulator expects two more rate cuts this year if economic indicators meet forecasts. In total, this amounts to 50 basis points, which allows investors to assess the Fed's further steps.

"Many people believe that the Fed's actions are already priced in for the rest of the year," comments Jake Dollarhide, CEO of Longbow Asset Management. "But I think the Fed may have more surprises in store for 2024. It is quite possible that the soft landing scenario will actually happen."

The market reacts to forecasts
The Fed already took a step towards easing policy earlier this month, cutting the rate by 50 basis points. Investors are closely monitoring the likelihood of a similar decision in November, which, according to CME Group, fell to 35% from 37% before Powell's speech and 53% on Friday.

Results of the day: all indices are positive
The Dow Jones Industrial Average added 17.15 points (+0.04%), reaching 42,330.15. The S&P 500 rose by 24.31 points (+0.42%) and ended the day at 5,762.48. The Nasdaq Composite showed an increase of 69.58 points (+0.38%) and closed at 18,189.17.

Now, investors' attention is focused on future Fed statements and economic data, which can either confirm or adjust the market's expectations regarding the further movement of interest rates.

Best September in Seven Years
The S&P 500 ended September with a gain of 2%, which was its best result for this month since 2013. Moreover, this is the fifth month in a row when the S&P 500 has demonstrated positive dynamics. By the end of the quarter, the index added 5.5%, Nasdaq showed growth of 2.6%, and the Dow Jones became the leader, having strengthened by an impressive 8.2%.

Short-Term Volatility
The market reaction to Jerome Powell's statements was mixed. After his speech, the indices went down, but towards the end of the trading session there was a reversal and the market recovered. Experts believe that one of the reasons for this movement could be the activity on the last day of the quarter, when investors are trying to fix their positions.

"There's always a lot of trading activity toward the end of a quarter — it's standard behavior to buy the winners and dump the losers," says Jake Dollarhide, CEO of Longbow Asset Management.

The Fed and Market Expectations
The Federal Reserve is in a wait-and-see period ahead of its November meeting, according to Quincy Crosby, chief global strategist at LPL Financial, as it receives a slew of new economic data that will shape the path of monetary policy.

There are several key releases coming this week, including initial jobless claims and private payrolls. The market is watching these indicators closely as they could impact the rate decision.

CVS Health Stock Rises
The company's stock jumped 2.4% on news that activist shareholder Glenview Capital Management is set to meet with CVS Health executives. According to insiders, the meeting will be devoted to possible changes in the company's strategy to improve its efficiency.

Optimism on the stock markets
On the New York Stock Exchange, the number of shares that showed growth exceeded the number of those that fell by 1.06 to 1. On the Nasdaq, this ratio turned out to be balanced - 1.00 to 1, which indicates an even mood of market participants.

The S&P 500 registered 30 new annual highs and only two new lows, while the Nasdaq index showed 82 new peaks and 88 lows. Current data indicates significant volatility, but also an active recovery of the positions of leading companies.

Trading volumes are high
Trading volumes on US stock exchanges reached 12.64 billion shares, which is higher than the average for the last 20 sessions, which is 11.93 billion. Increased activity may be due to investor nervousness amid statements by Fed Chairman Jerome Powell and increased uncertainty about further monetary policy.

Markets in anticipation
The MSCI world stock index started the week on a minor note and showed a decline, while the dollar strengthened amid reduced expectations for a more aggressive easing of the Fed's policy. Powell made it clear that the regulator does not intend to sharply cut rates yet, which increased volatility in the markets and adjusted investor expectations. At the same time, oil futures ended trading sideways due to uncertainty around the conflict in the Middle East.

Powell's comments wobbled
Markets were mixed after Powell said the Fed would not force a rate cut. Investors who had expected a deeper cut are reconsidering their positions as the Fed chief raised the prospect of two 25 basis point rate cuts by the end of the year, provided the economy continues to grow within current forecasts.

Strong inflation data supports gains
Wall Street's major indexes rose strongly last week after U.S. core inflation data came in below expectations, raising the prospects for further monetary easing. However, as of Monday, the probability of a 50 basis point rate cut in November had fallen to 36.7% from 53.3% on Friday, according to CME Group.

Investors continue to assess the likelihood of further rate cuts as the U.S. economy shows mixed signals. The focus remains on employment, inflation and GDP growth data, which could either strengthen Powell's position or lead to a revision of current forecasts. The market remains in a state of heightened uncertainty, which is reflected in trading volumes and volatility.

Rates are high, and so are risks
In the coming weeks, market participants will be closely watching the speeches of Fed officials for the slightest hint of a possible change in course. Market expectations have become more subdued, but any new information could change the situation again.

Stocks have returned to previous levels
Despite an initial decline at the time of Jerome Powell's speech, the S&P 500 and Dow indices ended the session at record highs, recouping losses in the final hours of trading. The gains came on the final day of the quarter, when investors traditionally adjust portfolios, adding additional volatility to the market.

"The strong close can be partly attributed to the impact of so-called 'quarterly rebalancing', a typical practice of recalibrating portfolios at the last minute to improve performance," said Rick Meckler, partner at Cherry Lane Investments.

Strong growth for the month and quarter
The S&P 500 index rose 2.01% in September, demonstrating an impressive fifth consecutive month of positive dynamics. And for the quarter, it strengthened by 5.53%, which underscores the market's resilience amid uncertainty over the Fed's further actions.

The MSCI Global Index also ended the day in the red, falling 0.21% to 851.02. However, for the month, the index gained about 2%, and for the third quarter, it showed a strong growth of 6%, which indicates a restoration of optimism among global investors.

Risk Factors Remain in Play
Per Stirling Capital's Tim Phipps warns that investors continue to keep a close eye on the geopolitical situation in the Middle East, the aftermath of Hurricane Helen and the threat of a major US dock strike. Added to this is the uncertainty surrounding the Chinese economy, which is struggling to maintain growth momentum with new stimulus measures.

China Adds Positive to Asian Markets
China's stock market has responded with a strong rally as Beijing unveils stimulus packages. The CSI300 index of China's leading companies posted its biggest daily gain since 2008, jumping 8.5%. This follows a rally over the past five trading days, during which the index has gained more than 25%.

Investor Strategies and Expectations
Investors remain in a holding pattern as further moves by both the Fed and major economies such as China could have a significant impact on global markets. Current events highlight the importance of balancing domestic and external risks, including macroeconomic indicators and geopolitical factors.

Against this backdrop, experts recommend caution and focus on portfolio diversification, as instability could prove to be a long-term trend.

Fed chief's hawkish stance worries the market
The US currency strengthened after Jerome Powell signaled that the Fed may not cut rates significantly in November. The statement caught the market by surprise and forced investors to reassess their expectations.

"It looks like Powell has taken his share of hawkish pills," said Steve Englander, head of global G10 FX research and macro strategy at Standard Chartered Bank, with irony. In his opinion, traders are now starting to worry that the regulator is really set for two small rate cuts of 25 basis points this year.

The dollar is steadily growing against major currencies
The dollar index, reflecting its dynamics against key currencies such as the euro and the yen, rose by 0.32%, reaching 100.76. As a result, the euro weakened to $1.1133, which is 0.27% lower than the day before, and the dollar against the yen rose by 1% to 143.61.

The debt market reacts to the Fed's rhetoric
The yield on US Treasury bonds also changed following the updated expectations of investors. The benchmark 10-year bond rose by 3.6 basis points, reaching 3.785%. This is higher than the value of Friday, when the yield was 3.749%.

Two-year bonds, which are usually more sensitive to interest rate changes, showed an even sharper move. Their yields rose 7.4 basis points to 3.637%, up from 3.563% late Friday.

Yield curve signals shift in sentiment
The gap between the two-year and 10-year Treasury yields, often used as a proxy for economic growth expectations, was 14.6 basis points. That figure is seen as a sign of rising investor confidence in the resilience of the U.S. economy despite continued uncertainty around monetary policy.

What's next?
A stronger dollar and rising bond yields highlight a shift in market sentiment. Market participants will be watching further Fed comments and economic data to see whether the Fed will continue to tighten its rhetoric or decide to pursue more aggressive easing later in the year.

US oil shows its biggest drop in a year
US WTI oil prices fell slightly, ending the day at $68.17 per barrel, losing just 1 cent during the trading session. However, the results of September turned out to be much more dramatic - the cost of raw materials fell by 7% in a month, which was the largest drop since October 2023. By the end of the quarter, the drop reached 16%, which makes it the most significant in the last year.

Brent is also in the red
The global benchmark of Brent crude oil closed the session at $71.77 per barrel, down 21 cents. In September, Brent fell by 9%, showing the strongest monthly drop since November 2022 and continuing the downward trend for the third month in a row. The quarterly results are even less comforting: Brent lost almost 17%, which was the most significant quarterly decline in the last 12 months.

Gold Cools Off After Explosive Rally
After an impressive rally fueled by the Fed's soft rhetoric and geopolitical tensions, gold retreated slightly, taking a pause before the end of the quarter. The spot price of the precious metal fell by 1% to $2,631.39 per ounce. US gold futures also showed a correction, falling by 0.54% to $2,629.90 per ounce.

Gold's Best Quarter Since the Start of 2020
Despite the current weakness, the precious metal is ending the quarter with its best results since the beginning of 2020. Investors view gold as a reliable safe-haven asset amid high uncertainty in financial markets and escalating geopolitical risks, including instability in the Middle East.

Outlook
With oil prices falling and gold stabilizing, the energy and precious metals market remains in a zone of high volatility. Market participants will be watching the actions of major oil producing countries and how the global economy develops, which could determine the future trajectory of commodity assets in the next quarter.
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USD/JPY: Shigeru, Ueda, and ADP report

The yen is losing ground again. After nearly a 500-pip rally, the Japanese currency has been falling against re greenback again. On Monday, the USD/JPY pair hit a two-week low, dropping to 141.66, reacting to the unexpected results of the elections of the ruling political party's leadership. The Liberal Democratic Party is now headed by Shigeru Ishiba, who has taken over the government and announced plans to hold early parliamentary elections—one year ahead of schedule.

The yen responded positively to Ishiba's victory, as he is considered a proponent of tight monetary policy and raising interest rates to combat inflation. Importantly, he defeated Sanae Takaichi, a candidate from the highly conservative wing of the LDP (who was considered the frontrunner in the race), who, in contrast, advocated for a softer monetary policy.

In response to Ishiba's victory, the USD/JPY pair dropped 500 pips, falling from 146.50 to the mid-141 range. However, as is often the case with political factors, their influence fades quickly—by the end of the week, the pair's buyers had recovered almost all lost points. The "Shigeru factor" was swiftly priced in by the market, which is quite logical, given that the election of a new prime minister, even one with "hawkish" views, doesn't mean the Bank of Japan will automatically accelerate rate hikes. Ishiba will play his part, of course, but not immediately and not in the public sphere. Don't expect any "Trump-style" statements from the new Japanese prime minister, like those made by the former US president who openly urged the Federal Reserve to cut interest rates.

Meanwhile, the classic fundamental factors suggest that the Bank of Japan will not rush into the next round of rate hikes. In particular, the Tokyo Consumer Price Index reflected a slowdown in inflation: the overall CPI dropped to 2.2% in September (after rising to 2.6% in August), while the core CPI fell to 2.0%. This index is considered a leading indicator for determining inflation trends nationwide, so its downward trend is a worrying sign for USD/JPY sellers. Other macroeconomic indicators also disappointed. Japan's industrial production volume dropped by more than 3% in August on a monthly basis (-3.3%) against a forecast of -0.5%. Additionally, the volume of new housing starts in Japan declined sharply in September by 5.1% (against a forecast drop of 3.3%).

Such fundamental conditions do not support the tightening of monetary policy. Bank of Japan Governor Kazuo Ueda confirmed this assumption in his recent speeches. He emphasized the need to maintain a wait-and-see strategy, "considering global economic risks and financial market instability." In his speech yesterday, he also reiterated a cautious stance. According to him, the regulator will pursue "appropriate monetary policy in order to sustainably and stably achieve the inflation target of 2%."

For the most part, the Bank of Japan's leader made general, conventional, and non-committal statements. But this is precisely what is weighing on the Japanese currency. Many of his policymakers (Naoki Tamura, Hajime Takata, and Junko Nagakawa) hinted in their September speeches that the central bank might raise interest rates again in the near future. They specifically pointed to wage indicators (which showed positive dynamics, rising by 1.1% year-on-year in June and 0.4% year-on-year in July).

However, Kazuo Ueda cooled the enthusiasm of USD/JPY sellers. He stated that the October data on service prices "will be key in determining whether inflation is accelerating." Only after a thorough analysis of this data, the regulator will shed light on whether any policy changes can be expected.

In other words, the head of the Bank of Japan cast doubt on another rate hike this year, though he did not rule out such a scenario. This indecisiveness from Ueda disappointed USD/JPY sellers. So, the yen ceased to act as a "driving force" in the USD/JPY pair.

All of this suggests that a resumption of a downward movement is only possible if the US dollar weakens. The instrument is following the dollar index, which in turn is awaiting the key report of the week—the US nonfarm payrolls to be published the day after tomorrow, on October 4. I remind you how traders reacted to the ADP report, which came out in the green today, reflecting the creation of 144,000 jobs in the private sector. On the one hand, this is a relatively modest result. On the other hand, most experts expected this figure to be around 124,000. This has sparked hope among dollar bulls that nonfarm payrolls will also be in the green. In that case, the likelihood of a 50-point rate cut at the November meeting will drop to 20-15%, and the dollar will receive additional (and quite significant!) support.

From a technical perspective, the USD/JPY pair has approached the resistance level of 145.30 (the upper line of the Bollinger Bands indicator on the daily chart). It would be advisable to enter long positions after buyers break above and consolidate above this level. In that case, the next medium-term target for the upward movement will be 147.00, which is the lower border of the Kumo cloud on the same time frame.
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