Wall Street ends lower as investors turn cautious ahead of Fed rate decision

Wall Street’s three main stock indexes ended lower in choppy trading on Tuesday as caution set in ahead of an anticipated interest rate cut from the Federal Reserve.

Investors are largely still pricing in a 25 basis-point cut from the US central bank at the conclusion of its two-day meeting on Wednesday, to offset the deterioration in the US labor market, evidenced by numerous recent economic indicators.

Data on Tuesday showed that US retail sales increased more than expected in August, but that did little to change rate cut expectations.

“Any kind of resilient economic data will only reaffirm the hawks on the FOMC … and could give a little bit of fuel for (Fed Chair Jerome) Powell to come out as slightly more hawkish than the market is hoping for,” said Ross Mayfield, investment strategist at Baird Private Wealth Management.

Investors also brushed off news that the US Senate confirmed White House economic adviser Stephen Miran to the Fed Board and an appeals court rejected President Donald Trump’s bid to fire Fed Governor Lisa Cook.

The Dow Jones Industrial Average fell 125.55 points, or 0.27%, to 45,757.90, the S&P 500 lost 8.52 points, or 0.13%, to 6,606.76 and the Nasdaq Composite lost 14.79 points, or 0.07%, to 22,333.96.

Six of the 11 S&P 500 subsectors ended lower. The utilities and real estate sectors fell 1.81% and 0.66%, respectively.

The CBOE Volatility Index climbed to its highest level in more than a week to 16.04 points.

UnitedHealth Group shares fell 2.3% and Nvidia shares dropped 1.6%, weighing on the Dow. Nvidia shares fell after Reuters reported weak demand in China for its new AI chip.

The S&P 500 and the Nasdaq closed at all-time highs on Monday after hitting intraday records in multiple sessions. The three main indexes had gained so far in September – a month traditionally deemed bad for US equities.

Webtoon Entertainment soared 39% after a deal with Disney to create a new digital comics platform to feature content from Disney’s portfolio, including the Marvel and “Star Wars” franchises.

Oracle rose 1.5% after Trump said that the US and China have a deal that will keep the short-video app TikTok operating in the US and multiple news outlets, citing sources, said Oracle is part of the investor consortium.

On the Nasdaq, advancing issues outnumbered decliners by a 1.01-to-1 ratio. Declining issues outnumbered advancers by a 1.07-to-1 ratio on the NYSE.

The S&P 500 posted 15 new 52-week highs and 13 new lows while the Nasdaq Composite recorded 89 new highs and 58 new lows.

Volume on US exchanges was 17.11 billion shares, compared with the 16.31 billion average for the full session over the last 20 trading days.

(Reporting by Abigail Summerville in New York and Purvi Agarwal and Sukriti Gupta in Bengaluru; Editing by Maju Samuel and Matthew Lewis)

US yields edge lower after data flurry with Fed on deck

NEW YORK – US Treasury yields slipped on Tuesday in a choppy session, retreating from earlier highs after a flurry of economic data, including a gauge of retail sales as investors braced for the Federal Reserve’s policy statement.

Yields briefly extended gains after the Commerce Department said retail sales rose 0.6% last month, above the estimate of economists polled by Reuters calling for a rise of 0.2% and after an upwardly revised 0.6% advance in July, indicating consumers remain willing to spend.

“There’s this undercurrent of hope out there and it might even be misplaced … where people are thinking maybe we’ll get 50 (basis points) tomorrow and maybe the Fed’s going to be incrementally more dovish than we think, and oh wait, there’s some retail sales, the economy is still pretty good,” said Jason Ware, chief investment officer at Albion Financial Group in Salt Lake City, Utah.

“To me as an investor, that’s what I want to see. I want to see a Fed that is lowering rates in a measured way because they can afford to as opposed to having to cut 50 because they have to.”

Other data from the Labor Department showed import prices increased 0.3% last month, topping expectations calling for a decline of 0.1%, after a downwardly revised 0.2% rebound in July, hinting that domestic inflation could heat up in the coming months.

The yield on the benchmark US 10-year Treasury note fell 0.6 basis point to 4.028% after rising to a session high of 4.064% after the data.

The Fed will make its policy announcement on Wednesday, and the market has fully priced in a rate cut of at least 25 basis points, with a roughly 4% chance for an outsized 50 basis-point cut, according to CME’s FedWatch Tool.

A federal appeals court in Washington said on Monday that Governor Lisa Cook could remain in her job while litigation over President Donald Trump’s effort to fire her proceeds.

The US Senate confirmed Stephen Miran, currently on leave as the head of the White House’s Council of Economic Advisers, to an open seat on the central bank’s seven-member Board of Governors as Trump attempts to reshape the composition of the Fed.

The yield on the 30-year bond shed 0.9 basis point to 4.646%.

An auction of USD 13 billion in 20-year bonds by the Treasury was seen as solid by analysts, with demand for the debt at 2.74 times the bonds on sale.

A closely watched part of the US Treasury yield curve measuring the gap between yields on two- and 10-year Treasury notes, seen as an indicator of economic expectations, was at a positive 51.6 basis points.

The two-year US Treasury yield, which typically moves in step with interest rate expectations for the Fed, fell 2.5 basis points to 3.51% after earlier climbing to 3.578%.

The breakeven rate on five-year US Treasury Inflation-Protected Securities was last at 2.447% after closing at 2.443% on Monday.

The 10-year TIPS breakeven rate was last at 2.371%, indicating the market sees inflation averaging about 2.4% a year for the next decade.

(Reporting by Chuck Mikolajczak in New York; Editing by Matthew Lewis and Nia Williams)

Fed-fueled frenzy sends gold to uncharted territory above USD 3,700

Gold vaulted past USD 3,700 an ounce levels for the first time on Tuesday as rising bets on a rate cut by the Federal Reserve this week fueled a rally that has been stoked by safe-haven demand, central bank buying, and a weaker dollar.

Spot gold rose 0.3% to USD 3,690.59 per ounce, as of 10:49 am ET (1449 GMT), after hitting a record high of USD 3,702.95 earlier in the session. US gold futures for December delivery rose 0.2% to USD 3,727.50.

“Global growth uncertainty and geopolitical risk continue to keep haven demand high but the gold rally is being driven largely by anticipation of aggressive rate cuts from the Federal Reserve,” said Zain Vawda, analyst at MarketPulse by OANDA.

Traders are pricing in a near-certain 25-basis-point rate cut at the end of the two-day meeting on September 17, with a small chance of a 50-bp reduction, per the CME FedWatch tool.

US President Donald Trump, in a social media post on Monday, called for Fed Chair Powell to enact a “bigger” rate cut.

Non-yielding bullion tends to do well in a low interest rate environment.

The dollar fell to a more than two-month low against rivals. A weaker greenback makes gold less expensive for other currency holders.

“Gold is surging on a sharply weaker dollar, which is at lows not seen since July,” said Tai Wong, an independent metals trader.

“Caution may be in the wind, though, ahead of the critical Fed decision tomorrow, so a bit of profit-taking shouldn’t surprise.”

Bullion, renowned as a hedge against uncertainties, has surged about 41% since the start of the year. It breached USD 3,600 per ounce on September 8.

Analysts say the rally has been driven by a potent mix of sustained central bank buying, intensifying safe-haven flows, a global shift away from the US dollar, which is also facing persistent weakness.

Spot gold surged 27% in 2024 and broke the USD 3,000 mark for the first time in March, as uncertainty over Trump’s trade policies drove investors toward the safe-haven asset.

Elsewhere, spot silver was down 0.2% at USD 42.64 per ounce, after hitting its highest level since September 2011 earlier in the session.

Platinum fell 0.5% to USD 1,394.00 and palladium eased 0.5% to USD 1,178.14.

(Reporting by Anushree Mukherjee and Kavya Balaraman in Bengaluru; Editing by Anil D’Silva, Shailesh Kuber, and Nick Zieminski)

Gold scales new high as dollar weakens ahead of Fed meeting

Gold prices scaled a record peak on Tuesday, supported by a weaker dollar ahead of the Federal Reserve’s policy meeting this week, where the central bank is widely expected to cut borrowing rates.

FUNDAMENTALS

* Spot gold rose 0.1% to USD 3,680.17 per ounce as of 0109 GMT, after hitting a record high of USD 3,689.27 earlier in the session.

* US gold futures for December delivery were flat at USD 3,718.80.

* The dollar traded near a 2-1/2-month low against the euro and close to a 10-month trough versus the risk-sensitive Aussie. A weaker greenback makes gold less expensive for other currency holders.

* US President Donald Trump in a social media post on Monday called for Fed Chair Jerome Powell to enact a “bigger” cut to benchmark interest rates.

* Traders are pricing in a near-certain 25-basis-point (bps) rate cut at the end of the two-day meeting on September 17, with a small chance of a 50 bps reduction, per the CME FedWatch tool.

* Lower interest rates reduces the opportunity cost of holding non-yielding bullion.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund (ETF), said its holdings rose 0.21% to 976.80 tonnes on Monday from 974.80 tonnes on Friday.

* Meanwhile on Monday, a US appeals court refused to allow Donald Trump to fire Fed Governor Lisa Cook – the latest step in a legal battle that threatens the Fed’s longstanding independence.

* Elsewhere, spot silver held steady at USD 42.71 per ounce, platinum eased 0.1% to USD 1,399.40 and palladium gained 0.4% to USD 1,188.59.

DATA/EVENTS (GMT)
0430	Japan Tertiary Ind Act NSA Jul
0600	UK Claimant Court Unem Chng Aug
0600	UK ILO Unemployment Rate Jul
0600	UK HMRC Payrolls Change Aug
0900	Germany ZEW Economic Sentiment, Current Conditions Sep
1230	US Import Prices YY, Retail Sales MM Aug
1315	US Industrial Production MM Aug

(Reporting by Brijesh Patel in Bengaluru; Editing by Sumana Nandy)

Oil steady as market weighs supply risk from attacks on Russian refineries

Oil prices held steady in early trade on Tuesday after rising in the previous session, as market participants contemplated potential supply disruption from Russia after Ukrainian drone attacks on its refineries.

Brent crude futures edged up 4 cents to USD 67.48 a barrel by 0000 GMT while US West Texas Intermediate crude was at USD 63.32, up 2 cents. On Monday, Brent settled up 45 cents at USD 67.44 while WTI settled 61 cents higher at USD 63.30.

Ukraine has intensified attacks on Russia’s energy infrastructure in an attempt to impair Moscow’s war capability, as talks to end their conflict have stalled.

“Heightened fears of supply disruptions from Russia, a key producer accounting for over 10% of global oil output” is helping oil prices, IG market analyst Tony Sycamore said in a client note.

US Treasury Secretary Scott Bessent on Monday said the government would not impose additional tariffs on Chinese goods to encourage China to halt purchases of Russian oil unless European countries hit China and India with steep duties of their own.

Investors are also watching out for the US Federal Reserve’s September 16-17 meeting at which the bank is widely expected to cut interest rates. Lower borrowing costs could boost fuel demand.

“A weaker US dollar, driven by expectations of a Federal Reserve rate cut this week, further supported crude oil,” Sycamore said.

The US dollar index, which measures the greenback’s strength against six peers, slipped to a nearly one-week low. A weaker dollar makes oil less expensive for holders of other currencies.

Adding to the risk profile of Middle Eastern oil supply, the Israeli military launched a ground offensive on Monday to occupy Gaza City, Axios reported, citing Israeli officials.

Meanwhile, US and Chinese officials said on Monday they have reached a framework agreement to switch short-video app TikTok to US-controlled ownership in a rare breakthrough in months-long talks.

Previous instances of easing US-China trade tension have boosted risk sentiment and increased oil demand expectations.

(Reporting by Anjana Anil in Bengaluru; Editing by Christopher Cushing)

Dollar on back foot as traders eye series of Fed rate cuts

TOKYO – The dollar traded near a 2-1/2 month low against the euro and close to a 10-month trough versus the risk-sensitive Aussie on Tuesday as investors cemented bets for a Federal Reserve interest rate cut this week and more to follow.

The greenback changed hands just shy of a more than two-month low on the British A pound, with US President Donald Trump renewing calls for aggressive monetary easing.

Markets see a rate reduction of at least 25 basis points on Wednesday as a certainty, with a small chance of a super-sized 50 basis-point cut. A total of 67 basis points of reductions are seen over the rest of this year, rising to 81 basis points by end-January.

Trump in a social media post on Monday called on Powell to enact a “bigger” cut to benchmark interest rates in a social media post, pointing to the housing market.

Rapidly softening labour market data has been the key driver of the ramp-up in easing bets in recent weeks, resulting in a lower dollar and bond yields while pushing up equity prices, with Wall Street setting new records on Monday.

There is an “increasing view that the Fed is behind the curve and needing to ramp up the urgency to take rates to neutral,” said Chris Weston, head of research at Pepperstone.

“The weight of capital is moving ever closer to a consensus position that the Fed cut rates not only in the September meeting, but also in October and December, and possibly in January too.”

The euro was little changed early in Asia’s morning, changing hands at USD 1.1765, not far from last Tuesday’s high of USD 1.1780, a level that had not been seen since July 28.

Sterling was steady at USD 1.3605 after reaching USD 1.3621 in the previous session for the first time since July 8.

The Australian dollar held firm at USD 0.6672, right below Monday’s high of USD 0.6674, the highest since November 8.

The US dollar was flat at 147.42 yen.

(Reporting by Kevin Buckland; Editing by Sam Holmes)

Oil holds gains as investors eye impact from attacks on Russian energy facilities

SINGAPORE – Oil prices were little changed on Monday as investors assessed the impact of Ukrainian drone attacks on Russian refineries that could disrupt its crude and fuel exports, while also eyeing US fuel-demand growth.

Brent crude futures edged up 3 cents to USD 67.02 a barrel by 0009 GMT while US West Texas Intermediate crude was at USD 62.77 a barrel, up 8 cents.

Both contracts gained more than 1% last week as Ukraine stepped up attacks on Russian oil infrastructure, including the largest oil exporting terminal Primorsk and the Kirishinefteorgsintez refinery, one of the two largest refineries in Russia.

“The attack suggests a growing willingness to disrupt international oil markets, which has the potential to add upside pressure on oil prices,” JPMorgan analysts led by Natasha Kaneva said in a note, referring to the attack on Primorsk.

Primorsk has a capacity to load about 1 million barrels per day (bpd) of crude, making it a key export hub for Russian oil and the largest port in western Russia.

The Kirishi refinery, operated by Surgutneftegaz, processes about 17.7 million metric tons per year (355,000 bpd) of Russian crude, or 6.4% of the country’s total.

An oil company in Russia’s Bashkortostan region will maintain production levels despite a drone attack on Saturday, regional governor Radiy Khabirov said.

Pressure is mounting on Russia as US President Donald Trump reiterated on Sunday that he is willing to impose sanctions on Russia but Europe has to act in a way that is commensurate with the United States.

“Europe is buying oil from Russia. I don’t want them to buy oil,” Trump told reporters on Sunday. “And the sanctions … that they’re putting on are not tough enough, and I’m willing to do sanctions, but they’re going to have to toughen up their sanctions commensurate with what I’m doing.”

Investors are also watching US-China trade talks in Madrid that started on Sunday amid Washington’s demands that its allies place tariffs on imports from China over its purchases of Russian oil.

Last week, softer job-creation data and rising inflation in the US raised concerns about economic growth in the world’s largest economy and oil consumer even as the Federal Reserve is likely to cut interest rates during its September 16-17 meeting.

(Reporting by Florence Tan; Editing by Muralikumar Anantharaman)

Nasdaq notches record high close, traders look to Fed meeting

The Nasdaq notched a record high close on Friday in a mixed trading session, lifted by Microsoft as investors looked ahead to the Federal Reserve’s policy meeting next week, when it is widely expected to cut interest rates to counter a slowdown in the jobs market.

Fueled by Tesla and other technology-related stocks, the Nasdaq added to a rally in the previous session that saw all three indexes hit all-time highs.

Investors are laser-focused on the Fed’s meeting on Tuesday and Wednesday. Traders expect the central bank to cut interest rates by 25 basis points after recent data showed longstanding weakness in hiring and easing inflation concerns.

“Because we had such a nice jump in the stock market yesterday, investors are basically catching their breath,” said Sam Stovall, chief investment strategist CFRA Research. “There’s really not going to be any data between now and Wednesday. It’s a sort of wait-and-see attitude.”

Microsoft gained 1.8% after the technology giant avoided a possible hefty EU antitrust fine by offering customers reduced prices for Office products excluding Teams.

Tesla jumped 7.4% after board chair Robyn Denholm dismissed concerns that CEO Elon Musk’s political activity had hurt sales at the electric-vehicle maker and said the billionaire was “front and center” at the company after several months at the White House. With Friday’s surge, Tesla shares remain down 2% in 2025.

Declines in Goldman Sachs and paint-maker Sherwin-Williams kept the Dow Jones Industrial Average in negative territory. The S&P 500 declined marginally.

The University of Michigan’s survey showed US consumer sentiment fell for a second straight month in September as consumers saw rising risks to business conditions, the labor market and inflation.

The S&P 500 declined 0.05% to end the session at 6,584.29 points.

The Nasdaq gained 0.45% to 22,141.10 points, while the Dow Jones Industrial Average declined 0.59% to 45,834.22 points.

Seven of the 11 S&P 500 sector indexes declined, led lower by health care, down 1.13%, followed by a 0.97% loss in materials.

Following signs of a worsening jobs market, interest rate futures reflect expectations of cuts totaling 75 basis points by the end of the year.

For the week, the S&P 500 rose 1.6%, the Dow climbed almost 1% and the Nasdaq added 2%, helped by a revival in artificial intelligence trade after cloud computing giant Oracle’s strong forecast on Tuesday.

Warner Bros Discovery jumped 17%, extending a surge from Wednesday, when a source said Paramount Skydance was preparing a bid for the struggling media company.

Shares of vaccine makers fell after a report said US health officials are planning to link coronavirus vaccines to the deaths of 25 children. Moderna declined 7.4%, while Pfizer and Novavax both lost more than 3%.

Declining stocks outnumbered rising ones within the S&P 500 by a 3.3-to-one ratio.

The S&P 500 posted 22 new highs and 3 new lows; the Nasdaq recorded 106 new highs and 43 new lows.

(Reporting by Purvi Agarwal and Ragini Mathur in Bengaluru and by Noel Randewich in San Francisco; Editing by Maju Samuel)

Wall St Week Ahead: Investors seek Fed’s view of shaky labor market as rate cut looms

NEW YORK – Investors will look for the Federal Reserve to communicate how worried it is about the flagging US labor market at its meeting next week, and they expect the central bank to cut interest rates for the first time in nine months to shore up employment.

On Thursday, inflation data came in slightly hotter than expected. Still, market players did not expect this would dissuade the Fed from easing rates on Wednesday, following several downbeat reports about US job growth.

More in doubt was the size of next week’s cut and how much the Fed expects to decrease rates in the coming months.

With some recent stability in trade and fiscal policy, “the Fed has moved back onto the front burner for investors going forward,” said Chris Fasciano, chief market strategist at Commonwealth Financial Network.

“Now that the labor market is weakening, the Fed becomes the dominant story for investors as to how they address that,” Fasciano said.

Expectations that the Fed will reduce interest rates have helped lift the major US stock indexes to record highs, along with excitement over the potential of artificial intelligence, strong corporate earnings, and calming fears about the economic fallout from President Donald Trump’s tariffs. The benchmark S&P 500 is up 12% so far in 2025.

As of Thursday, Fed fund futures indicated that markets were expecting a 90% chance that the Fed would lower rates by 25 basis points in next Wednesday’s policy decision, according to LSEG data. The balance of expectations left about a 10% chance for a larger-than-standard 50 bp cut.

Of the 55 rate reductions in the fed funds rate since 1990, 60% of those have been 25 basis point cuts, according to Nicholas Colas, co-founder of DataTrek Research.

Of the 18 times the Fed has cut by 50 bps, all but one occurred during or just after recessions, Colas said in a research note. The one exception was in September 2024, which was the first of three cuts totaling 100 basis points last year, resulting in the current rate of 4.25%-4.5%.

“Based on this history, which both the Fed and markets know, a 50 basis point cut would signal that the (Fed) is worried about the near future of the US economy,” Colas said in the note.

As it stands, Fed fund futures were baking in expectations of 73 basis points of easing by December or nearly three standard cuts. The central bank on Wednesday will give its latest summary of economic projections, updating its view of the economy and monetary policy.

As the Fed has held steady on rates so far in 2025, Chair Jerome Powell and other Fed officials have expressed wariness about Trump’s import tariffs possibly leading to higher inflation as a reason for forestalling rate cuts. Data on Thursday showed the consumer price index rose 2.9% on an annual basis in August, including the biggest monthly rise since January.

While the Fed has a dual mandate to ensure stable prices and maximum employment, investors will want to hear that the central bank is primarily focused on supporting the labor market, said Yung-Yu Ma, chief investment strategist at PNC Financial Services Group. After back-to-back weak monthly US employment reports, a government revision this week showed the economy likely created 911,000 fewer jobs in the 12 months through March than previously estimated.

“Those job revisions are just so extraordinary that they demand attention,” Ma said. Markets want to hear that “there’s a clear and pervasive shift to making sure that that weakness doesn’t become worse.”

Wall Street will also focus on technology shares and the AI trade after Wednesday’s 36% surge in shares of Oracle pushed the company’s market value close to USD 1 trillion. The enterprise software maker’s stunning stock gains were fueled by a wave of multi-billion-dollar cloud deals, showing the scramble for computing power in the AI race.

The Oracle stock surge was “stunning from a market dynamic standpoint that such a large company would see a market reaction of that magnitude,” PNC’s Ma said. “It illustrates the economy and technology, and about AI, that these developments are taking place very fast.”

(Reporting by Lewis Krauskopf; Editing by Alden Bentley and David Gregorio)

Dollar on back foot as jobless claims firm up Fed rate cut views

SINGAPORE – The dollar remained under pressure on Friday as a surge in US jobless claims and a modest tick up in inflation kept investors zeroed in on likely Federal Reserve interest rate cuts next week and beyond.

The dollar index was last trading at 97.585, having snapped a two-day winning streak on Thursday and on track to record its second consecutive weekly decline.

On Thursday, data showed the biggest weekly increase in the number of Americans filing new applications for jobless benefits in four years.

That overshadowed US consumer inflation data for August, which showed prices rising at the fastest pace in seven months but still modest and broadly in line with expectations.

While the mixed data might add some wrinkles to the Fed’s policy deliberations next week, investor focus is mostly centered on rate cut prospects for now.

“We’re quite betwixt and between, and the outlook is quite murky,” said Tim Kelleher, head of institutional FX Sales at Commonwealth Bank in Auckland. “The market is at a crossroads.”

The yield on benchmark 10-year Treasury notes edged up to 4.0282% compared with its US close of 4.011%, after a decline in yields that came close to crossing the 4% mark for the first time since April. Pricing of Fed fund futures indicates that the market believes the Fed is certain to cut its key interest rate by 25 basis points (bps) on September 17 as labor market softness overshadows inflation risks.

However, traders are reining in bets on a jumbo 50 bps rate cut next month, with pricing implying a shallower path of easing before the end of the year than anticipated earlier, according to the CME Group’s FedWatch tool.

Against the yen, the dollar was trading flat at 147.27 yen, little changed after the US and Japanese governments issued a joint statement on Friday, which reaffirmed that exchange rates should be “market determined” and that excess volatility and disorderly moves in exchange rates were undesirable.

The euro stood at USD 1.1727, depreciating 0.1% so far in Asia as traders curbed their bets on another European Central Bank rate cut this cycle, now seeing another move as a coin toss, after the bank sounded sanguine about the economic outlook.

Euro zone rate setters kept their key interest rate on hold at 2% for a second straight meeting, with ECB chief Christine Lagarde saying that the bank remains in a “good place” and said risks to the economy had become more balanced than before.

The Australian dollar was last trading 0.1% firmer at USD 0.6665, holding steady near a 10-month high, while the kiwi slipped 0.1% to USD 0.5971.

Sterling traded at USD 1.3572, slipping 0.1%, while the offshore yuan was last at 7.1135 yuan per dollar, trading flat.

(Reporting by Gregor Stuart Hunter; Editing by Sam Holmes)

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