U.S. Market Overview: Futures Edge Higher as Investors Await Fed Minutes and Navigate Ongoing Shutdown

                                                             Source: Krish Capital Pty Ltd

Index Update

U.S. investors brushed aside government shutdown worries and focused on corporate moves and the upcoming FOMC minutes for rate clues. In premarket trading, Tesla rebounded 0.6% after Tuesday’s sharp drop, while AMD rose 1.4% for a third straight gain. Oracle extended its decline, and megacap performance was mixed, with Nvidia, Amazon, and Microsoft inching higher, while Apple and Alphabet edged lower.

Market Movers

On Tuesday, the top gainers were Galecto, Inc. (+383.02%), followed by Zeta Network Group (+104.82%). On the contrary Boqii Holding Limited (-27.81%), and Hang Feng Technology Innovation Co., Ltd. (-23.90%) declined the most the same day.

Commodities Update

Crude oil prices extended gains on Wednesday, with WTI rising above $62 and Brent nearing $66 per barrel, supported by OPEC+’s smaller-than-expected production hike. Despite steady Russian exports, drone attacks on refineries have disrupted flows. However, upside momentum was capped by higher U.S. output forecasts and a larger-than-expected inventory build. Meanwhile, gold surged past $4,000 an ounce to a record high as investors sought safety amid economic and geopolitical uncertainty, a dovish Fed outlook, and the ongoing U.S. government shutdown. The metal has gained over 50% this year, fueled by central bank buying and strong ETF inflows.

Macro Updates

U.S. Mortgage Applications Decline Despite Lower Rates

U.S. mortgage applications fell 4.7% in the week ending October 3, extending the prior 12.7% drop and erasing much of the recent rebound. Despite easing benchmark mortgage rates, demand weakened as borrowers remained uncertain about future borrowing costs. Adjustable-rate loans rose to 9.5% of total applications, reflecting growing caution. Refinancing applications fell 8%, while home purchase applications declined 1%.

Dollar Strengthens to Two-Month High on Global Policy Divergence

The U.S. dollar index rose to around 98.8, its highest level in two months, as dovish signals from other central banks and political instability abroad lifted demand for the greenback. The dollar surged against the New Zealand dollar after a surprise 50-basis-point rate cut and also gained versus the euro and yen amid turmoil in France and fiscal stimulus expectations in Japan. Investors are now focused on the ongoing U.S. government shutdown and upcoming Fed minutes for further policy cues.

Bonds Commentary

U.S. 10-year Treasury yields hovered around 4.13% on Wednesday after a slight decline, as concerns over the prolonged government shutdown and global uncertainty drove demand for safe-haven assets. With the shutdown in its second week delaying key data, investors anticipate a quarter-point Fed rate cut this month and another in December, while awaiting the FOMC minutes and remarks from Chair Powell for further policy direction.

Futures Update

U.S. stock futures edged higher on Wednesday following Tuesday’s decline, as investors awaited remarks from several Federal Reserve officials and the minutes of the Fed’s September meeting. With the ongoing government shutdown delaying key data and earnings season approaching, traders are closely watching signals on growth and interest rates. Despite recent caution, equities remain near record highs, supported by strength in AI and technology stocks. However, underlying uncertainty persists, reflected in gold prices surging above $4,000 an ounce as investors seek safety.