US stock futures ticked upward on Wednesday as investors on Wall Street anticipated the release of the Federal Reserve’s latest meeting minutes, seeking insights into future monetary policy amid a backdrop of limited economic data due to the ongoing government shutdown. Futures for the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 each gained approximately 0.2%, following a tough day for major market indices.
In the commodities realm, gold futures continued their extraordinary climb, having breached the $4,000 per ounce mark for the first time on Tuesday. This surge is partly attributed to investors flocking to gold as a “debasement trade” alternative to the dollar amid growing economic uncertainty.
Market sentiment appeared increasingly cautious as the enthusiasm surrounding artificial intelligence investments began to wane. Questions about increased AI spending and the potential formation of a dot-com-like bubble began to circulate, particularly following a decline in the S&P 500 and Nasdaq, which interrupted a seven-day streak of gains. Concerns were magnified by Oracle’s profit outlook, specifically regarding its cloud business.
The U.S. government shutdown, which has persisted for seven days, has further dampened investor spirits, stifling the flow of essential economic data that Wall Street typically relies on. The upcoming minutes from the Federal Reserve’s September meeting are particularly critical, as they may clarify the central bank’s intentions following its pivot to a rate cut for the first time in 2025. Investors are on the lookout for any signs that could derail expectations for two additional rate cuts later this year, especially in light of the current lack of data input that clouds policymakers’ future decisions.
The political impasse continues to foster uncertainty in the market. President Trump’s recent threat to withhold back pay from furloughed government workers is raising alarms about the broader economic repercussions of the ongoing standoff.
In premarket trading, a few key stocks were trending. FedEx saw its shares dip 2% after a filing revealed that Prime Capital Investment Advisors had reduced its stake in the courier service. In contrast, QuantumScape’s stock rose 7% after announcing a partnership with PowerCo SE at the IAA Mobility conference, showcasing its solid-state battery technology. They also revealed an agreement with Corning to develop manufacturing capabilities for ceramic separators for these batteries. On the other hand, Nano Nuclear Energy Inc. shares dropped 8% after disclosing securities purchase agreements with institutional investors.
Goldman Sachs strategist Peter Oppenheimer sparked interest with his commentary on stock market valuations, suggesting that while current conditions may resemble past bubbles, we are not in a bubble yet.
SoftBank announced plans to acquire ABB’s robotics unit in a significant $5.4 billion deal aimed at integrating hardware with AI technologies, highlighting a continued movement towards automation in the industry.
Within the Fed, discussions regarding interest rates continue to reflect a divide among officials. The lack of critical data due to the shutdown complicates their ability to make informed decisions. Recently appointed Fed governor Stephen Miran and Kansas City Fed president Jeff Schmid highlighted these differing perspectives in their speeches.
In a separate note, HSBC provided a sobering assessment of Intel, whose stock has risen by an impressive 90% over the past six months, crediting high-profile investors like Nvidia and the U.S. government. Despite this, analyst Frank Lee downgraded Intel’s stock rating, arguing it appears overvalued.
Nvidia also made headlines for its involvement with Elon Musk’s xAI, increasing its funding commitment to $20 billion as part of the startup’s ambitious data center project.
Lastly, shares of Confluent surged by 18% after reports revealed that the data streaming software maker was considering a sale due to acquisition interest. Gold’s remarkable ascent continued as futures fluctuated near record highs, echoing a broader trend of investors seeking safety in precious metals during turbulent times.
