Daily U.S. Market and Macro Update – Shutdown Risks, Commodities Moves, and Fed Outlook

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Index Update:  U.S. stocks rose on Monday, with the Dow up 0.15%, the S&P 500 gaining 0.26%, and the Nasdaq advancing 0.48%, driven by strength in tech and AI names like Nvidia, AMD, and Micron. Despite recent concerns over AI deal risks, debt, and energy constraints, optimism around earnings potential and reinvestment continues to support sentiment. With the Oct. 1 government funding deadline approaching, shutdown risks persist, but all major indexes remain on track for September gains—the Dow up 1.7%, S&P 500 up 3.1%, and Nasdaq up 5.3%.

Market Movers:  On Monday, the top gainers were Wolfspeed, Inc. (+1,726.45%), followed by Boqii Holding Limited (+233.22%). On the contrary MoonLake Immunotherapeutics (-89.93%), and KALA BIO, Inc. (-89.27%) declined the most the same day.

Commodities Update:  Oil prices extended losses on Tuesday, with WTI falling below $63 and Brent slipping under $67 per barrel. Markets reacted to rising supply prospects, including reports that OPEC+ may approve an extra 137,000 bpd output increase for November and the resumption of oil exports from Iraq’s Kurdistan region after a two-and-a-half-year halt. Hopes for a potential Gaza ceasefire, following a tentative U.S.–Israel peace plan proposal, also weighed on prices, though uncertainty remained as Hamas had not agreed. Concerns over a possible U.S. government shutdown added to demand worries.  Gold surged to a record above $3,860 per ounce, on track for its strongest monthly gain in 14 years, as investors sought safety amid political and economic risks. Failure of U.S. budget talks heightened shutdown fears, which could delay key economic data, while expectations of Federal Reserve rate cuts further boosted bullion. Adding to the cautious backdrop, Trump announced fresh tariffs on imported timber, lumber, cabinets, and furniture, effective mid-October. Gold has climbed more than 11% this month and 16% in Q3.

Macro Updates:  Shutdown Threat Puts Key U.S. Economic Data at Risk

The Labor and Commerce departments cautioned that a partial government shutdown would suspend major economic data releases, including September’s employment report, August construction spending, and trade figures—critical inputs for Federal Reserve policy decisions. While some limited reports, such as the August Metropolitan Area Employment release, would continue, most BLS, BEA, and Census Bureau publications would be paused. A prolonged shutdown could also delay the October 7 trade report and October 30 GDP estimate, with further data risks if the impasse persists.

Dollar Steadies as Shutdown Risks and Fed Outlook Dominate

The dollar index held near 98 on Tuesday after two days of declines, as investors focused on the looming Oct. 1 government funding deadline that could delay key economic data. Markets are now watching upcoming labor market indicators, including Friday’s nonfarm payrolls, for further direction. Fed official John Williams cited signs of labor market softness in backing last month’s rate cut, with traders pricing in another quarter-point cut in October and about 42 basis points of easing by year-end.

Trump Imposes New Tariffs on Lumber and Wood Products

President Donald Trump signed a proclamation imposing a 10% tariff on imported lumber and a 25% tariff on vanities, kitchen cabinets, and upholstered wooden products, effective October 14. Starting January 1, tariffs will rise to 30% on upholstered wooden products and 50% on cabinets and vanities from countries without a trade deal with the U.S.

Bonds Commentary:  The 10-year U.S. Treasury yield held near 4.14% on Tuesday after two days of declines, as investors weighed the risk of a government shutdown ahead of the Oct. 1 funding deadline, which could delay key data releases. Markets now look to upcoming reports, including nonfarm payrolls, job openings, private payrolls, and the ISM manufacturing PMI, for labor market signals. New York Fed President John Williams noted signs of labor market softness that supported his prior rate-cut vote, reinforcing expectations of further easing. Traders are pricing in a quarter-point cut in October and around 42 basis points of rate reductions by year-end.

Futures Update:  U.S. equity futures edged lower on Tuesday as investors weighed the risk of a looming federal government shutdown, with political negotiations showing no progress. By early morning, Dow futures were down 79 points (-0.2%), S&P 500 futures fell 10 points (-0.1%), and Nasdaq 100 futures slipped 37 points (-0.1%). The dip followed Monday’s Wall Street gains, which were supported by a slight drop in Treasury yields.

Stocks mostly moved higher during Monday’s trading, extending the gains seen last Friday. The S&P 500 rose by 17.49 points, or 0.26%, to close at 6,661.20. From a technical perspective, the index encountered resistance above last week’s highs and maintained its downward trajectory. Today, stocks may continue to fall or retest Monday’s lows. The 14-day Relative Strength Index (RSI) has eased slightly from overbought conditions, indicating potential momentum for the near term. Key support levels are around 6,555, with resistance expected near 6,710.