US indices fall after record highs, gold exceeds $4,000 per ounce for the first time
On Tuesday, leading US stock indices closed lower: the S&P 500 retreated from record highs, and gold futures exceeded $4,000 per ounce for the first time in history. Investors are reacting to political uncertainty in France and Japan, as well as the ongoing US government shutdown.
Gold hits record amid worrying signs
Demand for gold as a safe haven has increased due to concerns about the US budget crisis and expectations of further interest rate cuts. December gold futures on the Comex exchange rose 0.7% to $4,004.4 per ounce. The US government shutdown is now in its seventh day.
Markets react to politics and corporate news
The S&P 500 fell 0.20% (-91.99 points) to 46602.98, the Dow Jones Industrial Average fell 0.38% to 6714.59, and the Nasdaq Composite fell 0.67% (-153.3 points) to 22788.36.
Tesla shares fell 4.4% after introducing more affordable versions of the Model Y and Model 3, which investors saw as an attempt to revive demand. The consumer staples sector was the day’s worst performer, falling 1.4%.
“After such a rally in tech stocks and gold’s record rise, markets are clearly seeking balance,” noted Jake Dollarhide, CEO of Longbow Asset Management.
Meanwhile, IBM shares rose 1.5% after announcing a partnership with artificial intelligence startup Anthropic.
Europe and Asia Under Pressure from Politics
In Europe, the STOXX 600 lost 0.17%, while France’s CAC 40 closed unchanged after the previous day’s decline, triggered by the unexpected resignation of Prime Minister Sébastien Lecornu. French 10-year bond yields rose to 3.59%, while the euro weakened 0.47% against the dollar to $1.1655.
President Emmanuel Macron came under pressure after the fifth resignation of a prime minister in less than two years.
In Japan, index markets reached record highs following the election of Sanae Takaichi, a proponent of loose monetary policy. The yen weakened 1.05% to 151.95 per dollar.
Bonds and Commodities
The yield on 10-year US Treasury notes fell 3.5 basis points to 4.127%. Analysts believe investors are pricing in expectations of a Fed rate cut at the next meeting.
The oil market saw minimal changes: WTI rose 4 cents to $61.73, while Brent fell 2 cents to $65.45 per barrel.
