US Stock Futures Waver; Gold Closes in on $4,000: Markets Wrap

(Bloomberg) — European stocks and US equity futures struggled for direction on Tuesday as investors awaited political developments on both sides of the Atlantic. Gold closed in on $4,000 an ounce.

Futures on the S&P 500 edged lower after the index reached a new record on Monday, fueled by tech stocks riding the artificial intelligence spending boom. The greenback rose against all Group-of-10 peers and Treasury yields inched higher as the US government shutdown dragged on. Bullion climbed to a record $3,977 before backtracking.

Europe’s Stoxx 600 benchmark was little changed, with French stocks steady as President Emmanuel Macron made a last-ditch effort to salvage the government after Prime Minister Sebastien Lecornu’s resignation on Monday. Shell Plc gained after signaling a recovery in the performance of its oil and gas trading operation.

While equities worldwide have surged to successive record highs, worries over the US government shutdown and the political crisis in France have driven investors toward alternative assets such as gold and Bitcoin, sending both to new peaks. At the same time, a flurry of AI-related deals among chipmakers has propelled shares higher and fueled some concerns of a speculative bubble reminiscent of the late-1990s dot-com era.

For Michael Brown, senior research strategist at Pepperstone Group Ltd., worries about a tech bubble are overdone. The Magnificent Seven group of tech giants that have powered the bulk of the S&P 500 rally in recent years are trading at valuations in line with their five-ear averages, he said.

“If you’re now about to tell me that they’ve been expensive for five years, well those seven stocks have delivered a total return of >300% in that period of time, and look set to rally even further in the coming months,” Brown said. “In fact, the path of least resistance for the market at large continues to lead to the upside, as earnings growth remains strong, the underlying economy remains resilient, and as the monetary policy backdrop becomes increasingly loose.”

Monday’s Advanced Micro Devices Inc. deal was the latest big-budget data center agreement this year. It follows last month’s announcement that Nvidia Corp. was planning to invest as much as $100 billion in OpenAI amid demand for tools like ChatGPT and the computing power needed to make them run.

Tech firms are spending hundreds of billions of dollars on advanced chips and data centers, and the final bill may run into the trillions. The financing is coming from venture capital, debt and, lately, some more unconventional arrangements that have raised eyebrows on Wall Street.

In Asia, Japanese shares extended their rally after Sanae Takaichi’s near-certain ascent to become the country’s next prime minister had sent the yen sliding and drove up yields on long-tenor bonds. Chinese and Hong Kong markets were closed Tuesday.

Takaichi’s election shook up global markets Monday with stocks surging on prospects for more spending, while currencies and bonds weakened. The yen held its losses, hovering around the highly watched 150-a-dollar level.

“I think there’s definitely some more room to sell off, but at the same time I think this might be an overreaction,” said Tracy Chen, a portfolio manager at Brandywine Global, on Bloomberg TV.

Options traders are the least bullish on the yen in more than three years now that Takaichi appears in line to become the next prime minister.

Volatility in Japan’s longer-dated government bonds is on the rise following Takaichi’s win, and the moves may spill over to markets as far away as the US and UK, according to Goldman Sachs Group Inc.

What Bloomberg strategists say…

“Japan’s 30-year auction went off smoothly with a higher bid-to-cover ratio than the previous sale, which will be a relief for investors across G-10 long-term debt. A solid auction, but investors won’t get too excited about JGBs until they are certain whether Takaichi will be confirmed as prime minister.”

— Mark Cranfield, MLIV strategist.

Meanwhile, Goldman Sachs Group Inc. raised its gold forecast for December 2026 to $4,900 an ounce, up from $4,300, citing ETF inflows and central-bank buying. According to the latest data, the People’s Bank of China added to its gold holdings in September for an 11th consecutive month.

Such frenzied buying amid a broad decline in the dollar has lifted gold’s gains this year to more than 50%, putting the metal on track for its strongest annual advance since 1979. Investors starting to view gold as a safer asset than the dollar is “really concerning,” said Citadel’s billionaire investor Ken Griffin.

This year, traders have been betting more on gold, silver and Bitcoin, in what’s been called the “debasement trade.” The sudden push to a fresh all-time high in Bitcoin over the weekend has options traders adding to bets that the largest cryptocurrency will rally to $140,000.

Corporate News:

LG Electronics Inc.’s Indian unit is set to start taking orders for its $1.3 billion initial public offering, joining Tata Capital Ltd. to launch deals in what could be a record month for new listings in the country. A devastating fire at a major supplier for Ford Motor Co. is set to disrupt business for months, the Wall Street Journal reported. Elliott Investment Management has approached several Japanese companies about buying their shares in Sumitomo Realty & Development Co., according to people familiar with the matter. Some of the main moves in markets:

Stocks

The Stoxx Europe 600 was little changed as of 8:19 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 was little changed The MSCI Emerging Markets Index rose 0.2% Currencies

The Bloomberg Dollar Spot Index rose 0.2% The euro fell 0.2% to $1.1684 The Japanese yen fell 0.1% to 150.57 per dollar The offshore yuan was little changed at 7.1407 per dollar The British pound fell 0.3% to $1.3439 Cryptocurrencies

Bitcoin fell 1.2% to $123,806.26 Ether fell 0.4% to $4,673.44 Bonds

The yield on 10-year Treasuries advanced one basis point to 4.16% Germany’s 10-year yield advanced two basis points to 2.74% Britain’s 10-year yield advanced one basis point to 4.75% Commodities

Brent crude rose 0.3% to $65.65 a barrel Spot gold fell 0.3% to $3,950.11 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from John Cheng and Joanne Wong.

©2025 Bloomberg L.P.