Gold Rally Hits Pause as Shutdown Weighs on Stocks: Markets Wrap

(Bloomberg) — Stocks and the dollar slipped as the rising risk of a US government shutdown weighed on most asset classes. Gold’s record-breaking rally came to a halt.

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Spot gold fell 0.9% after touching a new all-time high earlier on Tuesday. The metal’s surge is pausing after a 45% gain this year, driven by expectations for Federal Reserve interest-rate cuts and haven appeal amid trade tensions and fading faith in US exceptionalism.

European stocks softened alongside US futures. BHP Group Ltd. fell as much as 4.8% in London after China’s state-run iron ore buyer temporarily halted purchases from the Australian miner. The dollar slipped, erasing September’s gains. US Treasuries were little changed.

Traders are looking ahead to a series of US labor reports due this week to gauge the Fed’s next move, with the release of Friday’s key payrolls report in doubt amid a budget impasse in Congress. The uncertainty comes as stocks trade near record highs, with the momentum fueled by looser policy, strong earnings and optimism over artificial intelligence.

“The main focus will be the US labor market, which should either confirm or challenge expectations of two more rate cuts in 2025,” said Susana Cruz, a strategist at Panmure Liberum. “If the shutdown delays the release, that could spark some anxiety.”

Vice President JD Vance said the US government is on track for a shutdown after President Donald Trump’s last-ditch meeting with congressional leaders ended without a deal. Many federal operations would pause and nonessential staff be furloughed if lawmakers fail to agree before the fiscal year ends.

The Bureau of Labor Statistics — responsible for a number of gold-standard US economic releases — would cease operations and likely delay Friday’s payroll report in the event of a shutdown.

“We advise investors to look past shutdown fears and focus on other market drivers,” wrote Mark Haefele, chief investment officer at UBS Global Wealth Management. “We continue to prefer quality fixed income, particularly those with medium-term maturities, which we believe offers a compelling combination of income and resilience in the event of slower growth.”

Corporate News:

China’s state-run iron ore buyer has told major steelmakers and traders to temporarily halt purchases of all new BHP Group cargoes, widening an earlier curb as contract talks have stalled, according to people familiar with the matter. UBS Group AG reiterated its scathing critique of Switzerland’s planned changes to banking regulation, saying they may put the firm’s role in the country at risk. Boeing Co. has started working on a next-generation single-aisle aircraft that could eventually replace the 737 Max, the Wall Street Journal reported. Jefferies Financial Group Inc. posted its best fiscal third-quarter revenue ever, buoyed by what the firm said is a strengthening environment for dealmaking and trading activity across the globe. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 fell 0.1% as of 10:25 a.m. London time S&P 500 futures fell 0.2% Nasdaq 100 futures fell 0.2% Futures on the Dow Jones Industrial Average fell 0.2% The MSCI Asia Pacific Index rose 0.6% The MSCI Emerging Markets Index rose 0.4% Currencies

The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.2% to $1.1747 The Japanese yen rose 0.5% to 147.89 per dollar The offshore yuan was little changed at 7.1278 per dollar The British pound rose 0.1% to $1.3443 Cryptocurrencies

Bitcoin fell 0.9% to $113,327.83 Ether fell 1.4% to $4,169.92 Bonds

The yield on 10-year Treasuries declined one basis point to 4.13% Germany’s 10-year yield was little changed at 2.71% Britain’s 10-year yield was little changed at 4.70% Commodities

Brent crude fell 0.9% to $67.35 a barrel Spot gold fell 0.9% to $3,798.59 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Michael Msika and Sagarika Jaisinghani.

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