United States
Wall Street closed out another solid quarter on Tuesday, with major indices posting modest gains despite lingering concerns about an imminent federal government shutdown. The S&P 500 rose 0.4% to 6,688.46, the Nasdaq advanced 0.3% to 22,660.01, and the Dow Jones Industrial Average climbed 0.2% to 46,397.89—marking yet another record closing high.
For the quarter, the S&P 500 gained 7.79%, its strongest third-quarter performance since 2020, while the Nasdaq surged 11.24%, its best Q3 since 2010. The Dow rose 5.22% over the three months. The September gains were particularly impressive given the month’s typically weak seasonal performance, with the S&P 500 posting its biggest September percentage gain since 2010.
The shutdown concern isn’t just political theatre—it could have real market implications. The Bureau of Labour Statistics would likely delay Friday’s crucial non-farm payrolls data, clouding the Federal Reserve’s path for interest rate cuts. Federal Reserve speakers offered mixed signals. Chicago Fed President Austan Goolsbee noted that recent tariffs may be causing businesses to pause decision-making, while Boston Fed President Susan Collins said further rate reductions may be appropriate given a weaker labour market, though officials must remain wary about persistent inflation. Fed Vice Chair Philip Jefferson warned that the central bank faces a cooling labour market alongside rising inflation pressures, complicating the policy outlook.
The JOLTS report showed US job openings rose 19,000 to 7.227 million by the end of August, bolstering the case for a rate cut later this month.
On the corporate front, Ford CEO Jim Farley delivered a bleak assessment of the electric vehicle market, predicting that Trump administration policies—including the elimination of the $7,500 consumer tax credit and softening emissions rules—could cut EV market share from around 10% to just 5%. Ford’s EV unit lost about $1.3 billion in the second quarter, with the company forecasting potential losses of up to $5.5 billion on EVs this year.
In other corporate news, Warren Buffett’s Berkshire Hathaway is reportedly in talks to buy Occidental Petroleum’s petrochemical business for around $10 billion, which would be Berkshire’s largest deal since 2022.
Europe
European stocks ended the month on a winning note, with the STOXX Europe 600 gaining 0.5% on Tuesday to wrap up its best September since 2019, rising nearly 1.5% for the month. The index now sits about 1% below its March record.
Over the quarter, miners and banks led the charge, with the banking sector climbing for a 12th consecutive quarter—marking its best winning streak since 2006. However, the media sector recorded its worst quarterly performance in over three years, while telecom booked its biggest quarterly loss in two years.
BHP shares fell 1.9% after reports that China’s state-run iron ore buyer told major steelmakers and traders to temporarily halt purchases of all new BHP cargoes, though a Chinese steel mining news site disputed the report.
Energy and automotive stocks declined, while media and personal care shares outperformed. Lumber stocks Stora Enso and UPM-Kymmene dipped after President Trump ordered 10% tariffs on imports of softwood timber and lumber, as well as 25% levies on kitchen cabinets and upholstered wood products.
Australia
The S&P/ASX 200 fell 0.2% to close at 8,848.80, erasing an earlier advance after the Reserve Bank of Australia held its key interest rate unchanged and warned about third-quarter inflation data, damping expectations of near-term policy easing. TD Securities said the RBA’s statement hints at the potential for no further rate cuts this year, noting more hawkish messaging than the previous week.
Bank shares, which are typically sensitive to interest rate decisions, drove the gauge’s decline, with index heavyweight Commonwealth Bank falling 0.9%. The ASX 200 declined 1.4% in September, its worst month since March.
ASX 200 futures are pointing down 11 points or 0.1% to 8,862, suggesting a cautious start to Wednesday’s session.
Across the Tasman, New Zealand’s S&P/NZX 50 index rose 1.2% to 13,292.36, capping a fifth straight month of gains with a 2.8% September advance.
Commodities and currencies
Gold climbed 0.7% to $3,858.96 an ounce, hitting fresh records as the potential US shutdown weighed on the dollar and heightened safe-haven demand.
Oil markets moved lower, with Brent crude falling 1.4% to $67.02 a barrel in choppy trading as OPEC+ considers boosting the pace of future output hikes.
Iron ore rose 0.5% to $103.55 a tonne, despite the concerns around BHP purchases from China.
The Australian dollar strengthened 0.6% to US66.13¢ following the RBA’s hawkish hold, while Bitcoin edged 0.04% higher to $114,396.
In bond markets, the US 10-year Treasury yield rose to 4.15%, while Australia’s 10-year yield stood at 4.29%.
Economic Calendar
EU:
- HCOB Eurozone Manufacturing PMI Sep 18:00
- CPI Estimate YoY Sep 19:00
- CPI MoM Sep 19:00
- CPI Core YoY 19:00
US:
- MBA Mortgage Applications Sep 21:00
- ADP Employment Change Sep 22:15
- S&P Global US Manufacturing PMI Sep 23:45
- ISM Manufacturing Sep 00:00
- Construction Spending MoM Aug 00:00
This article was written by James Woods, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
