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The record US stock rally took a breather on Tuesday as investors weighed cautious comments from Federal Reserve officials and concerns about the sustainability of AI-driven trading. The Dow Jones (US30) fell by 0.19%, the S&P 500 (US500) dropped 0.55%, and the Nasdaq (US100) closed 0.73% lower. Nvidia plunged 2.8% after a sharp Monday gain related to its $100 billion investment in OpenAI, as investors questioned the deal’s structure and energy requirements. Oracle and Amazon also fell, down 4.1% and 3.1%, respectively. Fed Chair Jerome Powell described stock prices as “quite richly valued” and stressed the need to balance inflation risks with a weakening labor market. Other Fed officials supported the cautious tone: Goolsbee warned against reigniting inflation, while Michelle Bowman noted that rate cuts could accelerate if job losses intensify.

The S&P Global US Composite PMI for September 2025 dropped to 53.6 from 54.6 in August, falling short of market expectations. Although the figure marks a second consecutive month of slower growth, it still points to the strongest quarterly expansion since late 2024. Service sector activity slowed to its weakest pace since June, while manufacturing output growth eased from August’s 39-month high. The services PMI fell to 53.9 from 54.5, largely in line with market expectations of 54 and marking the slowest growth since June, according to the flash estimate.

European stock markets were mostly up. Germany’s DAX (DE40) rose by 0.36%, France’s CAC 40 (FR40) closed 0.54% higher, Spain’s IBEX35 (ES35) gained 0.50%, while the UK’s FTSE 100 (UK100) had closed negative 0.04%. Data for September showed an acceleration in Germany’s private sector activity, as well as strengthening growth in the Eurozone’s service sector. In the UK, private sector growth slowed to its lowest level since May, with services expanding at a slower pace and manufacturing contracting further. Meanwhile, the OECD slightly raised its UK growth expectations to 1.4% for 2025 but indicated that inflation could reach 3.5% by year-end, the highest among major economies.

Sweden’s Central Bank, the Riksbank, unexpectedly lowered its policy rate by 25 basis points to 1.75% at its September meeting, defying market expectations for a hold. Policymakers stated the decision was aimed at supporting economic activity and returning inflation to target in the medium term. The Riksbank noted that conditions for stronger growth remain, and recent data provides confidence that elevated inflation is likely temporary. For now, the Central Bank stated that if its inflation and growth outlook holds, the rate is likely to remain at this level “for some time.”

Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by 0.99%, China’s FTSE China A50 (CHA50) gained 0.27%, and Hong Kong’s Hang Seng (HK50) fell by 0.70%, while Australia’s ASX 200 (AU200) closed 0.40% higher. Sentiment weakened as China’s policy measures fell short of expectations following a Monday press briefing by top financial regulators, including the head of the PBoC. Hong Kong closed ahead of Super Typhoon Ragasa, with most flights suspended until Thursday.

The Australian dollar strengthened to around $0.661 USD as investors processed stronger-than-expected consumer price growth in August. Data showed headline inflation accelerated to a one-year high, although core inflation eased, indicating mixed price pressures. The numbers did not change expectations that the Reserve Bank of Australia will keep rates unchanged at 3.6% at its September meeting, while the probability of a rate cut in November fell from 70% to 60% before the data release.

On Tuesday, the New Zealand dollar fell to $0.586 USD, returning to a more than two-week low after a brief lift in the previous session. The currency is also pressured by expectations of further rate cuts, after unexpectedly weak Q2 GDP data reinforced prospects for additional policy easing. Markets have fully priced in a 25 basis-point rate cut to 2.75% in October, with about a 25% chance of a larger, half-point move. On Wednesday, New Zealand’s Minister of Finance announced the appointment of Anna Breman as the country’s new Central Bank head, making her the first woman to hold the position. Breman, currently the first deputy governor of Sweden’s Central Bank, the Riksbank, will take up her post at the Reserve Bank of New Zealand (RBNZ) on December 1st. Breman is also the first foreign national appointed to the role in 37 years.

• S&P 500 (US500) 6,656.92 −36.83 (−0.55%)
• Dow Jones (US30) 46,292.78 −88.76 (−0.19%)
• DAX (DE40) 23,611.33 +84.28 (+0.36%)
• FTSE 100 (UK100) 9,223.32 −3.36 (−0.04%)
• USD Index 97.24 −0.11 (−0.11%)
   

News feed for: 2025.09.24

•  Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
• Japan Services PMI (m/m) at 03:30 (GMT+3);
• Australia Consumer Price Index (m/m) at 04:30 (GMT+3);
• German ifo Business Climate (m/m) at 11:00 (GMT+3);
• US New Home Sales (m/m) at 17:00 (GMT+3);
• US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

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