Wall Street ended mixed as optimism over a potential US government shutdown deal offset trade war caution and solid earnings. European and Asian markets rose on easing geopolitical tensions, while gold logged its sharpest one-day fall since 2020.
US stocks lack direction as investors weigh the extended government shutdown, easing trade tensions, and corporate earnings
Wall Street stocks were mixed on Tuesday as investors awaited further clues as to whether the US government shutdown—now the third-longest in US history—could be nearing a conclusion. White House economic adviser Kevin Hassett raised hopes when he said last night that the shutdown was ‘likely to end sometime this week’. On the trade war front, President Trump said he expects a ‘fair deal’ to be reached when he meets his Chinese counterpart President Xi in South Korea next week, easing tensions. The S&P 500 crept up +0.1%, the blue-chip DOW gained +0.6%, while the tech-laden NASDAQ dipped -0.1%. Key earnings reports from Coca-Cola (+4.0%) and General Motors (+16.2%) further bolstered sentiment, as earnings topped estimates. Philip Morris’ (-5.5%) soft outlook statement snuffed out early gains, despite higher-than-anticipated quarterly profit and revenue. US two-year yield dipped -1bp to 3.455%, while the US 10-year yield dropped -3bp to 3.961%.
European markets edge up in spite of UK debt concerns
The pan-European STOXX 600 index edged +0.2% higher, supported by the key country benchmarks—France’s CAC 40 (+0.6%), Germany’s DAX (+0.3%), and Italy’s FTSE MIB (+0.6%) each gaining. The UK’s FTSE 100 managed a +0.2% increase, in spite of official data revealing that last month the UK government borrowed the highest amount on record for any September, apart from 2020 at the height of the COVID pandemic. The news is yet another blow to Chancellor Rachel Reeves as the UK struggles to bring public finances under control.
Asian and Australasian equities track the US higher
Asian equities were mostly higher on Tuesday, tracking Monday’s gains on Wall Street—the Shanghai Composite (+1.4%), Hang Seng (+0.7%), Nikkei 225 (+0.3%), and Kospi (+0.2%) each closing in the green. Chinese toy company Pop Mart International, known for its flagship Labubu toy, saw its stock drop -8.1% ahead of its earnings report due after market close. Traders will be watching closely for signs that the frenzy surrounding its collectible toys has begun to wane. Mining giant BHP’s (+2.3%) reiteration of its guidance pushed the ASX 200 (+0.7%) to record highs on Tuesday. Among other resource leaders, Fortescue jumped +1.3%, Rio Tinto climbed +0.9%, and Woodside Energy rose +0.6%. The local NZX 50 inched +0.2% higher, led by gentailers Meridian (+1.9%) and Contact (+1.6%).
Gold’s lustre shows signs of fading
Gold prices (-5.5% to US$4,114.73/oz) took their biggest daily tumble since November 2020—the day Pfizer and BioNTech announced their COVID-19 vaccine was 90% effective in trials—as trade war tensions eased, relieving some of the pressure in the crowded trade. Similarly, silver prices slumped -7.6% to US$48.51/oz. Meanwhile, WTI crude recovered +1.0% to US$58.09/bbl.
NZ Headlines
Meridian Energy is assessing how its hydro dams—particularly those in the Pūkaki and Waitaki schemes—could be modified to store more water by increasing lake levels and optimising water use within existing structures. CEO Mike Roan said this review forms part of a broader, long-term evaluation of New Zealand’s hydro generation and storage capacity.
NZ RegCo has issued a ‘trade with caution’ notice for Being AI after its shares surged nearly +250% since early September, citing concerns that the sharp rise may not be justified given limited trading volume. The regulator emphasised that the warning relates only to share price movement, not the company’s compliance or disclosure practices.
Alliance Group shareholders have approved a NZ$270 million deal to sell 65% of the company to Ireland’s Dawn Meats, with 87% voting in favour at a special meeting in Invercargill. Chair Mark Wynne said the result gives a clear mandate for the co-operative to proceed with the partnership.
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