Closing Recap

U.S. stocks finished mixed with a slight downward bias as investors took a breather after a massive rally, with the S&P 500 snapping its 9-day win streak; markets digested cautious commentary from Fed Chair Powell, while the dollar firmed, gold hit another record, and Treasury yields were little changed. In the currency markets, the U.S. dollar firmed as Fed Chair Powell struck a cautious tone on rate cuts, pushing the EUR/USD pair below 1.1800, while political and economic uncertainty weighed on the British Pound and Japanese Yen. 

Key Takeaways 

• Stocks Consolidate Near Highs: Major indices pulled back slightly in a quiet session, with the S&P 500’s 9-day winning streak ending, as investors digested recent gains and awaited fresh catalysts. 
• Powell’s Cautious Tone: Fed Chair Powell’s first public remarks since last week’s rate cut were seen as neutral, as he emphasized the need to balance inflation risks with a cooling labor market, offering little new guidance. 
• Gold Hits New Record High: Gold prices surged to a new all-time high, driven by persistent safe-haven demand, a weaker dollar (early), and expectations of a prolonged Fed easing cycle. 
• Economic Data Mixed: Flash PMIs for September showed a slight cooling in U.S. economic activity but remained in expansionary territory, while a regional manufacturing survey disappointed. 
• Dollar Rebounds on Cautious Fed: The U.S. dollar firmed from multi-week lows as Fed Chair Powell’s cautious remarks tempered aggressive rate cut bets, pushing the Euro and Pound lower, while the Yen drifted amid domestic political uncertainty. 
• Bitcoin Remains Under Pressure: Bitcoin prices fell below $113,000 as the broader crypto market saw profit-taking and significant liquidations, erasing some of the gains from the post-Fed rally. 
• Yields & Oil Steady: Treasury yields and crude oil prices were little changed in a lackluster trading day. 
• Government Shutdown Risk Looms: The market is beginning to price in the risk of a partial U.S. government shutdown as the September 30th funding deadline approaches. 

Market Overview

U.S. equity markets took a well-deserved breather today, with major indices finishing mixed to slightly lower after a powerful multi-week rally that has pushed stocks to record highs. The S&P 500 snapped its impressive nine-day winning streak, closing modestly in the red. The session was dominated by commentary from a host of Federal Reserve officials, headlined by Chairman Jerome Powell’s first public remarks since last week’s pivotal interest rate cut. 

Index	Last	Change	% Change
S&P 500	6656	-36.79	-0.0055
Nasdaq	22573	-215.5	-0.0095
Dow Jones	46292	-88.76	-0.0019
Russell 2000	2457	-5.82	-0.0024

Powell struck a cautious and balanced tone, emphasizing the delicate act of managing inflation risks while being attentive to a cooling labor market. His remarks were largely seen as neutral and did not provide any clear signals about the pace or timing of future rate cuts, leaving the market in its current data-dependent state. Other Fed speakers offered a range of views, from dovish to hawkish, highlighting the internal debate at the central bank. 

Economic data released yesterday was mixed. The flash S&P Global PMIs for September showed that U.S. economic activity continued to expand but at a slightly softer pace than in August. In Europe, flash PMIs were also mixed, while political uncertainty in France and Japan, and fiscal concerns in the UK, contributed to a cautious global mood. With the market having already priced in significant Fed easing, investors appear to be in a consolidation phase, awaiting the next major catalyst, which will likely be key inflation and jobs data in the coming weeks.

Economic Calendar

The U.S. economic calendar yesterday featured flash PMI data and a host of Fed speakers, including Chair Powell. 

• Fed Chair Jerome Powell Speech: Struck a cautious tone, emphasizing the need to balance inflation and employment risks. 
• Speeches from Fed’s Goolsbee, Bowman, and Bostic. 

Economic Data Released Today: 

• Japan Flash Manufacturing PMI (Sep): Fell to 48.4, its steepest decline in six months, weighing on the Yen.
• UK S&P Global Flash PMIs (Sep): The Composite PMI declined to 51.0, weaker than the 52.7 forecast, pressuring the Pound.
• S&P Global Flash PMIs (Sep): Composite 53.6 (vs. 54.6 Aug), 
• Services 53.9 (vs. 54.5 Aug), 
• Manufacturing 52.0 (vs. 53.0 Aug). 
• Richmond Fed Mfg Index (Sep): -17 (vs. -7 Aug). 

Major International Releases (Today): Flash PMIs for France, Germany, Eurozone, and UK. 

Commodities, Treasuries and Currencies 

Gold prices surged to another record high, with the December futures contract gaining $40.60 (+1.06%) to settle at $3,815.70 per ounce. The rally was driven by persistent safe-haven demand, a weaker U.S. dollar, and expectations that the Fed will continue its easing cycle despite Powell’s cautious tone. The precious metal is having its best year since the 1970s, propelled by the Fed’s new easing cycle and strong safe-haven demand.Crude oil prices posted a modest gain, with WTI settling up $0.61 at $63.30/bbl. 

Asset	Change	Unit	Last
WTI Crude	0.61	USD/bbl	63.3
Brent	1.06	USD/bbl	67.63
Gold	40.6	USD/oz	3815.7
EUR/USD	0.0011	USD	1.1813
USD/JPY	-0.14	JPY	147.57
US 10-Yr Yield	-2.0 bps	%	0.04125

In the currency markets, the U.S. dollar firmed slightly as Chair Powell’s cautious remarks tempered the most aggressive bets on near-term rate cuts. The DXY dollar index rose 0.1% to 97.40. The EUR/USD pair weakened below 1.1800, pressured by Powell’s comments and concerns over a severe contraction in French PMI data. The British Pound also lost ground as UK PMI data showed a softer pace of expansion, trading below the key psychological level of 1.3500. USD/JPY edged higher as disappointing Japanese manufacturing data and a mild risk-off tone weighed on the Yen.

Large options expiries are set for today’s New York cut, including €1.8B at 1.1800 in EUR/USD and £1.3B at 1.3500 in GBP/USD. In a quiet session, these levels could act as powerful magnets, potentially containing price action.

U.S. Treasury yields were little changed, with the 10-year yield hovering around 4.125%, as the bond market remained in a holding pattern ahead of key U.S. data later in the week. Cryptocurrencies fell sharply, with Bitcoin down 2.5% and Ethereum down 7%, as a wave of liquidations hit the market. The digital asset space remained weak. Bitcoin continued its slide, trading below $113,000 as the market is still reeling from the massive $1.5 billion liquidation event that sparked a sharp sell-off earlier in the week.

Looking Ahead 

The market will continue to digest the slew of central bank commentary from today, but the primary focus will now shift to key U.S. economic data later this week, including the final estimate of Q2 GDP on Thursday and the pivotal PCE inflation report on Friday. These releases will be the final major inputs for the market before the September 30th government funding deadline, which is also emerging as a potential source of volatility. Earnings season is largely complete, but any remaining reports will be watched for corporate guidance. The key question for equities is whether yesterday’s pullback was the start of a deeper correction or simply a one-day pause. The market’s reaction today will be telling; watch if dip-buyers re-emerge to defend key technical levels.