Stocks Slide as Shutdown Nears; Gold Rally Pauses: 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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Gold fell toward $3,800 an ounce after touching a fresh all-time high earlier Tuesday. After surging more than 10% this month on optimism over US interest rate cuts and haven demand, traders speculated that Chinese investors pared exposure ahead of the Golden Week holiday.

S&P 500 futures dipped 0.1%. The dollar edged lower, erasing September’s advance. Treasuries were set to close out a third straight quarter of gains. Brent crude fell to around $67 a barrel as OPEC+ weighed fast-tracking its latest round of supply hikes.

Traders are looking ahead to a series of US labor reports this week to gauge the Fed’s next move, with Friday’s release of payrolls data in doubt amid a funding impasse in Congress. The uncertainty comes as the S&P 500 is headed for its best September in 15 years, fueled by looser policy 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 if lawmakers fail to compromise 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.”

Fed Vice Chair Philip Jefferson warned Tuesday that the central bank faces a cooling labor market alongside rising inflation pressures, complicating the policy outlook.

“I see the risks to employment as tilted to the downside and risks to inflation to the upside,” Jefferson said in remarks prepared for the fourth International Monetary Policy Conference hosted by the Bank of Finland. “It follows that both sides of our mandate are under pressure.”

The Fed’s Susan Collins and Austan Goolsbee are due to deliver speeches later on Tuesday. Investors will also look at August JOLTS data, which is expected to show weakening demand for labor.

“The closer the headline is to estimates, the better, as a too-hot or too-cold print could weigh on already shaky markets amid the government shutdown worries,” said Tom Essaye at The Sevens Report.

What Bloomberg Strategists say….

Gold, equities and the dollar are all losing ground today, raising the specter of a sell-everything wobble should a US government shutdown lead to a data void. If the Fed rate-cut cycle — a key reason behind the latest leg of the buy-everything rally — becomes harder to anchor, we could well see a pullback.

— Nour Al Ali, Macro Markets & Squawk. For the full analysis, click here.

Corporate News:

EchoStar Corp. shares jumped in premarket trading as the satellite-TV company engaged in talks to sell some of its wireless spectrum to Verizon Communications Inc. Exxon Mobil Corp. plans to cut about 2,000 jobs globally as the Texas oil company consolidates smaller offices into regional hubs as part of its long-term restructuring plan. Spotify Technology Inc. named two new co-chief executive officers as the company’s co-founder Daniel Ek transitions to the role of executive chairman. 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

S&P 500 futures fell 0.1% as of 8:28 a.m. New York time Nasdaq 100 futures were little changed Futures on the Dow Jones Industrial Average fell 0.2% The Stoxx Europe 600 was little changed The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index fell 0.1% The euro rose 0.1% to $1.1742 The British pound rose 0.1% to $1.3447 The Japanese yen rose 0.4% to 147.97 per dollar Cryptocurrencies

Bitcoin fell 1.1% to $113,087.28 Ether fell 1.4% to $4,168.5 Bonds

The yield on 10-year Treasuries declined two basis points to 4.12% Germany’s 10-year yield was little changed at 2.71% Britain’s 10-year yield was little changed at 4.70% Commodities

West Texas Intermediate crude fell 1.9% to $62.26 a barrel Spot gold fell 0.5% to $3,814.78 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Michael Msika, Sagarika Jaisinghani and Jack Ryan.

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