Stock Markets Tumble on Inflation Fears and US Shutdown
Stock markets experienced a mixed week, with concerns over inflation and the ongoing US government shutdown weighing on investor sentiment. Key indexes closed down on Tuesday, while overseas markets settled with varied results.
Hawkish comments from Federal Reserve officials, including Kansas City Fed President Jeff Schmid and Minneapolis Fed President Neel Kashkari, sparked concerns about inflation, negatively impacting stocks. This, coupled with the US government shutdown now entering its second week, delayed key economic reports and dampened market sentiment.
Major indexes, such as the S&P 500, Dow Jones Industrials, and Nasdaq 100, all closed lower on Tuesday. December E-mini S&P and Nasdaq futures also fell in tandem. Meanwhile, consumer credit growth slowed in August, rising by +$0.363 million, the smallest increase in six months.
Despite the overall downturn, Advanced Micro Devices (AMD) surged over +3% on Tuesday, building on Monday's +23% gain, driven by increased AI spending. Gold prices, meanwhile, reached another record high after Goldman Sachs raised its gold price forecast.
Looking ahead, market focus will shift to tariffs, trade developments, and attempts to end the US government shutdown. Overseas markets remain volatile, with the Euro Stoxx 50 closing down -0.27% and Japan's Nikkei Stock 225 hitting a new record high. In the Eurozone, Dr. Joachim Nagel and Christine Lagarde are set to discuss potential interest rate cuts at their respective banks' next meetings in October 2025.
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