US government shutdown fears froze global market momentum

Global markets moved cautiously on Tuesday as fears of a United States government shutdown placed traders on edge at the close of September.

Investors tried to build on Monday’s gains but found little room to push further. Futures tied to the Dow Jones Industrial Average fell 3 points or 0.01%. S&P 500 futures slipped 0.02%, and Nasdaq 100 futures lost 0.03%.

Stocks across the board had finished Monday stronger, driven by a rebound in names linked to the artificial intelligence trade. Last week these shares lost ground over fears about the circular nature of AI deals and problems like rising debt and energy supply limits.

Investors remain split. Some say they expect strong earnings from the so‑called “Magnificent Seven” and other chipmakers to keep the market climbing. Others point to how fast sentiment can change if government spending halts.

US Treasury yields surge as Europe dips

The 10‑year Treasury yield dropped one basis point to 4.13%, while the 2‑year yield fell more than 2 basis points to 3.61%. The 30‑year yield stayed almost unchanged at 4.71%. One basis point equals 0.01%, and yields move opposite to prices.

European equities opened lower. The Stoxx 600 index was 0.2% down shortly after the bell with most sectors and main bourses in red. In China, the CSI 300 index added 0.45% to close at 4,640.69 as local traders reacted to mixed global signals.

In Australia, the central bank left its benchmark policy rate at 3.6% on Tuesday, meeting expectations as inflation stays at its highest level in more than a year. The S&P/ASX 200 lost 0.16% to 8,848.8.

In Japan, the Nikkei 225 fell 0.25% to 44,932.63, while the Topix gained 0.19% to 3,137.6. In South Korea, the Kospi dropped 0.19% to 3,424.60 and the Kosdaq slipped 0.56% to 841.99.

In Hong Kong, the Hang Seng index rose 0.95%, and the Hang Seng Tech Index jumped 2.38%. Shares of China’s Zijin Gold surged over 60% on their debut in Hong Kong, drawing attention from global traders watching precious metal flows.

Oil and gold prices fall as currencies slides

Oil prices weakened further on Tuesday as traders braced for another expected production increase by OPEC+ and tracked the restart of Iraq’s Kurdistan oil exports via Turkey, which supported market views of a supply surplus.

Brent crude futures for November delivery, which expire Tuesday, fell 84 cents or 1.2% to $67.13 a barrel by 0809 GMT. U.S. West Texas Intermediate crude traded at $62.68 a barrel, down 77 cents or 1.2%.

These moves extended Monday’s losses, when both Brent and WTI dropped more than 3% in their sharpest daily fall since August 1.

Gold’s record run paused. The metal eased 0.6% after touching record highs earlier in the session. European stocks softened alongside U.S. futures.

The dollar fell, erasing September’s gains, while U.S. Treasuries extended their advance. Gold’s rally has seen a 45% rise this year as Federal Reserve rate cuts and trade tensions increased its appeal.

Meanwhile, strategists are now watching the yen as a possible winner if the U.S. government shutdown goes through. Even though the dollar-yen pair has climbed 0.7% this month, it’s still down almost 6% for the year.

That’s because traders think Japanese interest rates will rise slowly, while the Federal Reserve is likely to cut.

The Swiss franc also gained ground, with the dollar falling 0.2% to 0.796 against it. It stayed flat against the euro at 0.9347 and was also unchanged against the British pound. Meanwhile, the Australian dollar pushed higher, rising 0.4% to $0.6604.

Back in Europe, the British pound didn’t flinch after data showed the UK economy grew 0.3% between April and June. Despite the gap though, sterling was last seen up 0.1% at $1.3448, but slightly weaker against the euro, which edged higher to 87.34 pence. Against the dollar, the euro also nudged up to $1.1742.

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