On Tuesday, the three major indices posted declines. The S&P 500 recorded its first drop in eight trading sessions. The US government shutdown entered its seventh day, after the Senate failed to pass the House's proposed funding bill five times, which would have provided government funding through November 21, dashing hopes for a Monday reopening.

**US Stocks** At the close, the Dow Jones fell 91.99 points or 0.20% to 46,602.98; the Nasdaq dropped 153.30 points or 0.67% to 22,788.36; the S&P 500 declined 25.69 points or 0.38% to 6,714.59. Tesla Motors dropped 4.4%, Advanced Micro Devices rose nearly 4%, and Strategy fell 8.7%. The Nasdaq Golden Dragon China Index fell 2.2%, with Alibaba declining 3% and Baidu dropping 4%.

**European Stocks** Germany's DAX 30 fell 11.96 points or 0.05% to 24,384.27; the UK's FTSE 100 rose 2.06 points or 0.02% to 9,481.20; France's CAC 40 gained 3.07 points or 0.04% to 7,974.85; the Euro Stoxx 50 dropped 15.12 points or 0.27% to 5,613.60; Spain's IBEX 35 fell 51.60 points or 0.33% to 15,521.50; Italy's FTSE MIB declined 64.13 points or 0.15% to 43,082.00.

**Crude Oil** November delivery WTI crude futures rose 4 cents or 0.06% to $61.73 per barrel; December delivery Brent crude futures fell 2 cents or 0.03% to $65.45 per barrel. The EIA short-term energy outlook report showed expectations for 2025 Brent prices at $68.64/barrel, up from previous estimates of $67.80/barrel. WTI crude is expected at $65.00/barrel for 2025, versus prior estimates of $64.16/barrel. For 2026, Brent is projected at $52.16/barrel, up from $51.43/barrel previously, while WTI is expected at $48.50/barrel, up from $47.77/barrel.

**Cryptocurrencies** Bitcoin fell over 2.2% to $121,941.8; Ethereum dropped over 4% to $4,499.63. Crypto-related stocks declined, with Strategy down 8.7%, Coinbase falling 2.67%, and Bitmine Immersion Technologies dropping 6.36%.

**US Dollar Index** The dollar index, measuring the greenback against six major currencies, rose 0.48% to close at 98.578. At the New York market close, one euro traded for $1.1658, down from $1.1713 the previous day; one pound traded for $1.3430, down from $1.3482. One dollar bought 151.83 yen, up from 150.30; one dollar bought 0.7981 Swiss francs, up from 0.7953; one dollar bought 1.3951 Canadian dollars, down from 1.3952; one dollar bought 9.4071 Swedish kronor, up from 9.3806.

**Precious Metals** Spot gold continued reaching new record highs, approaching $4,000 per ounce; NY gold futures broke through $4,000, closing at $4,004.4. FolioBeyond analyst Dean Smith said gold's rise reflects growing unease among investors about US assets. After nearly steady gains over the past two months, NY gold futures broke above $4,000 per ounce for the first time in history. Smith noted this rise reflects investors seeking safe-haven assets beyond the dollar or US Treasuries. "Global markets are hedging their bets," he said, adding that investors are no longer certain they want to tie "so much of their prosperity and economic future" to dollar assets. He indicated the uncertainty and risk reassessment behind gold's value rise "will take years to resolve."

**Macro News** **New York Fed**: Concerns about September job market conditions intensified, with inflation expectations rising slightly. A Tuesday report from the New York Fed showed Americans became more worried about the job market's future in September while raising forecasts for near-term inflation. The latest consumer expectations survey showed rising unemployment probability expectations, with respondents expecting higher overall unemployment rates than August projections. However, respondents also believed the chances of finding new employment within three months would be greater if unexpectedly unemployed.

The Fed noted job market concerns emerged as US households became more optimistic about their current financial situation while "slightly" downgrading expectations for the coming year. As of September, households reported reduced future spending expectations due to mixed views on future income levels.

September's report also found one-year inflation expectations rising to 3.4% from August's 3.2%, while three-year expectations remained stable at 3%. Five-year inflation expectations also rose to 3% from last month's 2.9%. Food price expectations for the next year reached their highest level since March 2023.

**Fed's Kashkari**: Sharp rate cuts would trigger high inflation. Fed's Kashkari (not a voting member this year) warned Tuesday that any sharp rate cuts risk triggering inflation. "You could see the economy experience high inflation. Basically, if you try to push economic growth faster than its potential growth rate and capacity to generate prices, you'll ultimately just get across-the-board price increases," he said. He warned that given slowing economic growth amid persistent inflation, current economic data shows some signs of stagflation.

**UK May Partially Ease Stablecoin Holding Limits** The Bank of England plans to provide exemptions to its proposed stablecoin holding limits, allowing crypto exchanges and other specific businesses to hold larger amounts of stablecoins. The BoE is expected to announce these stablecoin restrictions by year-end. The central bank will also allow businesses to use stablecoins as settlement assets in its "digital securities sandbox" to observe stablecoin operations while assessing the technology's application prospects.

September 15 reports indicated multiple crypto companies were lobbying the BoE to reconsider its stablecoin holding restrictions. These companies argued such limits disadvantage the UK by making its stablecoin industry regulation stricter than the US or EU. The BoE previously planned individual stablecoin holding limits of £10,000-20,000, with corporate limits at £10 million.

**Bank Reserves Continue Declining, Suggesting Fed May Be Nearing End of Balance Sheet Reduction** Funding pressures in US money markets remain elevated while Fed-held bank reserves gradually decrease, suggesting the Fed may be approaching the end of quantitative tightening. Since early September, overnight funding markets for daily lending between banks and asset managers have remained volatile. Ultra-short-term rates continue stubbornly high as the Treasury steadily builds cash reserves.

Consequently, the spread between the secured overnight funding rate (SOFR) and the Fed's benchmark rate (effective federal funds rate) has approached its widest since late 2024. Latest data shows bank reserves fell to slightly below $3 trillion, the lowest since January.

**WTO**: Expects Trump Tariffs to Drag Down 2026 Trade Growth The World Trade Organization said global goods trade growth is expected to slow significantly next year after surprisingly resilient growth in the first half of 2025, reflecting delayed drag from President Trump's tariff policies on international trade.

The WTO said Tuesday it expects global goods trade to grow 2.4% this year, well above its August forecast of 0.9%. This upward revision nearly matches the downward revision for 2026: now expecting just 0.5% growth versus 1.8% projected two months ago.

The WTO indicated these different outlooks suggest Trump's tariffs on US imports by country and industry may not be fully implemented until next year.

**Canada's August Trade Deficit Widens More Than Expected on Export Decline** Canada's August goods trade deficit widened to C$6.32 billion (about $4.53 billion) as exports fell faster than monthly import growth, according to official statistics released Tuesday.

August's trade deficit was the first widening since April, primarily due to declining exports to largest trading partner the US, plus August exports to other regions contracting. Statistics Canada reported total exports fell 3% while imports grew 0.9%.

August exports to the US totaled C$44.18 billion, down 3.4% from July, mainly affected by declining unprocessed gold exports. Other product categories also contributed to export declines, including lumber, machinery and equipment.

**EU Proposes Enhanced Steel Protection Measures: 50% Tariffs to Support Industry** The EU Tuesday announced new tariffs aimed at protecting its struggling steel industry. The European Commission proposed 50% tariffs on all steel imports exceeding quotas, double current rates, with quotas cut approximately 45%.

EU Industry Commissioner Stephane Sejourne said: "This is a very strict provision, unprecedented in Europe." Once implemented, only about 10% of steel used in EU markets would be tariff-free.

The EU currently imposes 25% tariffs on most steel imports after quota exhaustion. But this mechanism is temporary, expiring next year, prompting the Commission to develop longer-term protections.

New measures would cut total quotas across all steel categories to 18.35 million tons annually, about 45% below current levels. The plan would also set quotas for specific product types based on historical averages.

**Individual Stock News** **JPMorgan Chase CEO Supports SEC Easing Quarterly Earnings Reporting Rules** JPMorgan Chase CEO Dimon expressed support for reforming the SEC's quarterly earnings reporting requirements, saying he welcomes proposed relaxation policies. Last month, Trump reiterated that US companies should report earnings semi-annually rather than quarterly.

SEC Chairman Paul Atkins said last week the regulator is quickly following up on Trump's call, raising transparency concerns about potential major changes for US companies. Dimon, who has been vocally critical of regulations hampering public markets, said JPMorgan Chase would continue providing quarterly updates to investors, but "much less," even if no longer required.

**Tesla Motors Launches Low-Price Model Y in US to Boost Sales** Tesla Motors Tuesday unveiled US market low-price versions of its best-selling Model Y and Model 3, priced at $39,990 and $36,990 respectively. Amid intensifying competition, Tesla Motors is trying to reverse declining sales and market share.

Visually, the budget Model Y eliminates LED light strips, adopts a simpler front bumper, and removes rear projection taillights. The budget standard Model Y features smaller 18-inch wheels, with 19-inch wheels optional.

The budget Model Y standard version offers only three colors - gray, white, black - with the latter two costing $1,000 and $1,500 respectively. It also eliminates the panoramic glass roof standard on other Model Y versions.

Internally, measured by EPA standards, the budget rear-wheel-drive Model Y has an estimated 321-mile range, 10% less than the higher-end rear-wheel-drive Model Y. The budget standard Model Y lacks second-row touchscreens, meaning rear passengers cannot use 8-inch touchscreens, and the sound system has half the speakers of the premium rear-wheel-drive version.

The budget Model Y lacks ambient lighting, with steering wheel adjustment changing from electric to manual.

**Media: Anthropic Partners with IBM to Target Enterprise AI Market** Anthropic Tuesday announced partnership with IBM to integrate its AI models into IBM's software ecosystem. Both parties hope to combine this emerging AI startup with traditional IT giant capabilities.

IBM's latest integrated development environment (IDE) is the first product directly using Anthropic's flagship Claude AI model. The tool targets software engineers working at large enterprises, helping automate development tasks like code modernization.

IBM said it plans to add Claude to more software soon. As part of the agreement, IBM will also create guides helping enterprises build and scale their use of AI agents (robots that can independently perform tasks). The guide includes Anthropic's open-source standard - Model Context Protocol (MCP) - for connecting models to external systems.

**Analyst Ratings** TD Cowen: Lowered Netflix target price from $1,450 to $1,425.

Jefferies: Upgraded Advanced Micro Devices rating from Hold to Buy, raising target price from $170 to $300; lowered Blackstone target price from $207 to $199; raised BlackRock target price from $1,196 to $1,325.

HSBC: Initiated coverage on Google parent Alphabet with "Buy" rating, target price $285.