On Tuesday, the three major US indices paused their recent rally, with retail sales data showing resilience but having little impact on trading as US stocks struggled to gain momentum near historical highs. As markets await the anticipated Federal Reserve rate cut, the dollar weakened and gold prices broke through $3,700 per ounce for the first time during the session.

**US Stocks** At the close, the S&P 500 fell 0.13% to 6,606.76 points; the Dow Jones Industrial Average declined 0.27% to 45,757.9 points; and the Nasdaq Composite dropped 0.07% to 22,333.96 points. Oracle (ORCL.US) opened higher but ended up 1.4%, Tesla (TSLA.US) gained 2.8%, while Nvidia (NVDA.US) fell 1.6%. The Nasdaq Golden Dragon China Index rose 1.7%, with Alibaba (BABA.US) up 2.6% and NIO (NIO.US) surging 8%.

**European Stocks** Germany's DAX 30 fell 397.68 points or 1.68% to 23,336.07; the UK's FTSE 100 dropped 86.48 points or 0.93% to 9,190.55; France's CAC 40 declined 78.71 points or 1.00% to 7,818.22; the Euro Stoxx 50 fell 67.15 points or 1.23% to 5,373.25; Spain's IBEX 35 dropped 230.31 points or 1.50% to 15,158.19; and Italy's FTSE MIB declined 540.72 points or 1.26% to 42,513.00.

**Oil** October delivery light crude futures on NYMEX rose $1.22 to $64.52 per barrel, up 1.93%; November delivery Brent crude futures gained $1.03 to $68.47 per barrel, up 1.53%.

**Currencies** The dollar index, measuring the greenback against six major currencies, fell 0.68% to close at 96.639. At the New York market close, 1 euro traded at 1.1871 dollars, up from 1.1769 the previous day; 1 pound traded at 1.3662 dollars, up from 1.3605; 1 dollar traded at 146.40 yen, down from 147.32; 1 dollar traded at 0.7864 Swiss francs, down from 0.7942; 1 dollar traded at 1.3738 Canadian dollars, down from 1.3778; and 1 dollar traded at 9.2199 Swedish kronor, down from 9.2722.

**Cryptocurrencies** Bitcoin rose over 1.3% to $117,005.28; Ethereum fell 0.34% to $4,510.81.

**Gold** Gold futures for near-term delivery hit another record closing high, continuing to rise amid expectations of imminent Fed rate cuts. Gold futures gained 0.2% to $3,688.90 per ounce, marking the third consecutive trading day of record highs for near-term contracts. Bank of America stated in a report that economic data indicates the current financial environment favors gold. The bank noted: "Concerns about stagflation—typically favorable for gold—remain a focus for precious metals market participants." Bank of America also said the 2.9% Consumer Price Index reading for August provides additional support for gold. "Since 2001, gold has never declined when US CPI was above 2% and the Fed was implementing monetary easing."

**Macro News** House Republicans unveiled a temporary spending bill that excludes Democratic healthcare policy demands, aimed at avoiding a government shutdown on October 1st. The short-term legislation would keep government agencies operating until November 21st and provide new security funding for lawmakers, judicial, and executive officials. The bill requires at least seven Democratic votes in the Senate to reach the 60-vote threshold needed to overcome procedural hurdles.

US retail data exceeded expectations, with August retail sales rising 0.6% month-over-month, partly due to tariffs pushing up commodity prices rather than actual sales volume increases. Wells Fargo Senior Economist Sam Bullard noted: "While consumer spending shows some inherent resilience, overall growth is slowing. Households currently still have spending capacity, but growing concerns about the labor market suggest consumption growth may moderate in the remaining months of this year."

Fed communications suggest Powell's stance on the labor market this week may indicate future policy direction. With a Fed rate cut this week essentially certain, investors will focus on whether Powell will further advance his recent policy pivot. Key questions include whether the Fed will set three rate cuts for this year or maintain June expectations when the job market appeared more robust.

US August industrial production remained nearly flat, reflecting slight increases in manufacturing activity while utility output declined. Manufacturing output, which accounts for three-quarters of total industrial production, rose 0.2% in August after a slight decline in July. Mining and energy extraction grew 0.9%, while utility output fell 2%, the largest decline since March.

The September US homebuilder confidence index remained unchanged, but lower mortgage rates and expectations of Fed rate cuts boosted future home sales expectations. The 30-year fixed-rate mortgage average rate fell 23 basis points over the past four weeks to 6.35%, the lowest level since mid-October last year.

The UK will announce closer cooperation with the US on cryptocurrency matters. UK Chancellor Reeves and US Treasury Secretary Bessent discussed establishing closer transatlantic collaboration in digital assets and capital markets. Participants included crypto companies Coinbase, Circle, and Ripple, as well as Citibank, Bank of America, and Barclays.

PIMCO recommended that the Fed pause reducing its MBS holdings to boost the housing market. The firm noted that the Fed's continued reduction of MBS holdings over the past three years has led to "unusually wide" mortgage spreads of about 230 basis points as of last Friday, near historical highs.

Citadel Securities strategists suggest US stocks may face near-term volatility but expect a strong year-end finish. The rally that drove US stocks to new highs may experience some volatility in coming weeks but is expected to finish strong by year-end.

**Individual Stock News** Major US tech companies committed over $40 billion in UK investments. Microsoft (MSFT.US) announced it will invest $30 billion in UK AI infrastructure and existing operations through 2028, its largest financial commitment in the UK. Google (GOOG.US) plans to invest about $6.8 billion in the UK over the next two years for AI, R&D, and related engineering. Nvidia (NVDA.US), OpenAI, and UK company Nscale are partnering to build AI infrastructure in the UK to meet OpenAI's computing needs through the "Stargate (UK)" project.

**Analyst Ratings** Bernstein initiated coverage of Apple (AAPL.US) with an Outperform rating and $290 target price; lowered FedEx (FDX.US) target from $249 to $247. UBS raised its gold target for end-2025 to $3,800/oz from $3,500/oz, expecting $3,900/oz by mid-2026. ANZ Bank raised its end-2025 gold target from $3,600/oz to $3,800/oz, expecting gold to reach nearly $4,000/oz by June 2026. Lombard Odier raised its 12-month gold target to $3,900/oz, citing multiple supportive factors.