Closing Recap

U.S. stocks finished broadly higher, with the S&P 500 and Nasdaq notching new record highs, as dovish FOMC minutes solidified hopes for more Fed rate cuts and offset concerns from a prolonged government shutdown; gold surged to another all-time high, oil rallied, and the U.S. dollar weakened. In the currency markets, the U.S. dollar resumed its decline, with the DXY index slipping below 99 as the dovish Fed minutes weighed on the greenback, allowing the Euro to firm while the Japanese Yen plunged on domestic political turmoil.

 Key Takeaways 

• New Record Highs: The S&P 500 and Nasdaq Composite both closed at new all-time highs as the market’s upward momentum continued. 
• Dovish FOMC Minutes: Minutes from the September Fed meeting revealed a majority of policymakers supported the rate cut and signaled openness to further easing, boosting investor sentiment. 
• Government Shutdown Enters 9th Day: The market continues to shrug off the U.S. government shutdown, with the deadlock deepening in Washington, but the focus remains on the dovish Fed. 
• Gold Surges to New Record High: Gold prices climbed over 1.6% to settle at a new all-time high of $4,070.50 per ounce, fueled by a weakening U.S. dollar, dovish Fed expectations, and safe-haven demand. 
• U.S. Dollar firm: The U.S. dollar index fell as the Euro firmed, but the Japanese Yen was the main story, plunging to an 8-month low against the dollar as Japan’s new pro-stimulus Prime Minister creates policy uncertainty. 
• Bitcoin Corrects From Record Highs: The cryptocurrency has pulled back to the $122,000 level after hitting a new all-time high, as short-term profit-taking and a wave of long liquidations cooled momentum.
• Oil Rallies, Yields Flat: Crude oil prices rallied over 1.3% on hopes that Fed cuts will boost economic growth and demand, while Treasury yields were little changed. 
• Fed Chair Powell’s Remarks: This is the main event. While his welcome address is pre-recorded and expected to be brief, any unscripted comments or shifts in tone regarding the shutdown or labor market will be scrutinized intensely and could move markets.

Market Overview

U.S. equity markets took another leg higher today, with the S&P 500 and Nasdaq Composite pushing into uncharted territory to close at new all-time highs. After a brief period of consolidation yesterday, the “buy the dip” mentality returned with conviction as investors cheered the release of dovish minutes from the Federal Reserve’s September policy meeting. The minutes confirmed that a majority of policymakers supported last month’s rate cut and indicated openness to further easing this year, a message that resonated strongly with a market hungry for accommodative policy. The “hopium” for Fed cuts, as some traders call it, remains the dominant drug of choice. 

Index	Last	Change	% Change
S&P 500	6753	39.13	0.0058
Nasdaq	23043	255.02	0.0112
Dow Jones	46601	-1.2	-0.0001
Russell 2000	2483	25.57	0.0104

The market completely looked past the ongoing U.S. government shutdown, now in its ninth day, with no resolution in sight. The political stalemate in Washington has so far failed to dent the market’s bullish enthusiasm. The rally was broad, with market breadth favoring advancers, though small caps showed some underperformance. The remarkable run continues, with the S&P 500 up 34% in just six months and some analysts noting similarities to the sharp rallies that have historically ended with corrections. 

In other news, political turmoil in France and Japan is creating significant moves in the currency markets, and a host of Fed speakers provided commentary but did little to alter the dovish narrative established by the minutes. With the shutdown delaying key economic data, the market remains in a headline-driven mode, with a clear upward bias.

Economic Calendar

Yesterday, the U.S. economic calendar was dominated by the FOMC minutes release and today a heavy slate of Fed speakers will dominate the calendar, as the government shutdown continues to delay official data. 

Yesterday’s major U.S. events: 

• FOMC Meeting Minutes (from Sept 16-17 meeting): Revealed a majority supported the September rate cut and signaled openness to further easing this year. However, some members expressed caution, citing inflation concerns. The market interpreted the minutes as broadly dovish, reinforcing expectations for an October cut.

The data vacuum continues. The market will be entirely driven by a very heavy slate of central bank speakers, including Fed Chair Powell. 

• German Trade Balance (Aug): Showed a widening surplus as exports fell less than imports. 
• CANCELLED – US Weekly Jobless Claims. 
• Heavy Slate of Fed Speakers: Chair Powell (12:30 GMT), Bowman, Barr, Musalem, Kashkari, and Daly are all scheduled to speak. 
• BoE’s Mann Speaks (08:30 GMT). 
• ECB’s Lane Speaks (15:00 GMT).

Commodities, Treasuries and Currencies 

Gold prices surged to a new record high, with the December futures contract gaining a massive $66.10 (+1.65%) to settle at $4,070.50 per ounce. The rally was a direct response to the dovish FOMC minutes, which weakened the U.S. dollar and solidified expectations of further rate cuts. Crude oil prices also rallied, with November WTI gaining $0.82 (+1.33%) to settle at $62.55/bbl. The gains were driven by hopes that Fed-induced economic growth would boost demand, offsetting earlier profit-taking. 

Asset	Change	Unit	Last
WTI Crude	0.82	USD/bbl	62.55
Gold	66.1	USD/oz	4070.5
EUR/USD	-0.0032	USD	1.1623
USD/JPY	0.83	JPY	152.73
US 10-Yr Yield	+0.6 bps	%	0.04132

The currency market is being driven by a powerful trifecta: a hawkish repricing in Japan, a political crisis in Europe, and a data vacuum in the U.S., all of which are benefiting the U.S. Dollar. 

• USD/JPY: The Yen’s collapse has intensified, with the pair surging to an 8-month high above 153.00. The move is a direct result of Sanae Takaichi’s election, which markets see as a green light for renewed fiscal and monetary stimulus. The speed of the Yen’s -3.7% decline this week is now raising the specter of official intervention, with analysts flagging the 154.00-155.00 area as a potential trigger zone based on historical precedent. 
• EUR/USD: The pair is extending its losses for a third straight day, trading at a one-month low of 1.1622. The Euro is being hammered by the French political crisis and weak German data. The price is now battling its 100-day moving average (~1.1631), a level it hasn’t broken since March. Large options expiries today at 1.1600 (1.1B) and 1.1615 (2.1B) could provide some support for beleaguered bulls.
• GBP/USD: Sterling is showing some hesitation near the pivotal 1.3400 handle. The pair has been caught in a battle between dovish commentary from the Bank of England and the broader strength of the U.S. Dollar.

U.S. Treasury yields were volatile, with the 10-year yield largely unchanged on the day, as the bond market balanced the dovish Fed signal against ongoing supply and fiscal concerns. Bitcoin pulled back to the $122,000 level on profit-taking and a temporary firming of the dollar.

Looking Ahead 

With the U.S. government shutdown ongoing, official economic data releases, including weekly jobless claims, remain delayed. This will keep the market’s focus on commentary from the heavy slate of Fed speakers scheduled for the rest of the week. The unfolding political situations in France and Japan will also be key drivers for currency markets. With earnings season around the corner, investors will begin to shift their focus to corporate fundamentals, but for now, the market remains in a liquidity-driven, Fed-focused rally. The speed of the Yen’s decline is now the most critical issue in FX. Traders will be on high alert for any stronger language from Japanese officials. Any hint of imminent intervention could trigger a violent reversal in USD/JPY.