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News
Monday, October 06, 2025
What’s happening: US stocks closed mostly higher on Friday amid speculations of the Federal Reserve continuing to cut interest rates.
What happened: Both the Dow Jones and S&P 500 indices climbed to record closing highs on Friday, even as the US government shutdown extended for the third day.
The Nasdaq 100 settled lower due to declines in key tech stocks.
Why it matters: Although the much-awaited US nonfarm payrolls (NFP) report for September was scheduled for release on Friday, it was not published due to the government shutdown.
The Institute for Supply Management (ISM) data release showed that the US services PMI declined to 50 in September, from 52 in the previous month. The figure also came in below market estimates of 51.7 and signalled that the services sector had stalled. The S&P Global services PMI also fell to 54.2 in September, from 54.5 in the previous month.
Investors have historically shrugged off government closure, although a prolonged shutdown weighs on the economy. Markets expect the Fed to trigger economic growth by cutting its benchmark interest rates. The data releases also supported speculations of rate cuts ahead.
Markets are now fully pricing in a rate cut of 25 basis points (bps) at the Fed’s October meeting, while most traders expect another rate cut in December.
The Dow Jones index jumped 238.56 points, or 0.51%, to close at 46,758.28, while the S&P 500 added 0.01% to settle at 6,715.79 on Friday. The Nasdaq 100 bucked the trend and declined 0.43% to close at 24,785.52, with key tech stocks heading south. Shares of Amazon, Tesla and Nvidia were down around 1%, while Apple, Alphabet and Microsoft remained almost flat.
Both the Dow Jones and S&P 500 indices rose by 1.1% last week.
What to watch: Investors will keep an eye on talks related to the US government slowdown, which could impact the stock market ahead.
Data on RCM/TIPP Economic Optimism Index (1810 UAE Time) and consumer inflation expectations (1900 UAE Time) will be released today. The RealClearMarkets/TIPP Economic Optimism Index, which declined to 48.7 in August from 50.9 in the previous month, is expected to fall further to 48.5 in September. Analysts expect US consumer inflation expectations for the year ahead to slow to 3.1% in September from 3.2% in August.
Context: The EUR/USD forex pair fell this morning amid strength in the US dollar.
Details: Data released on Friday showed Eurozone’s industrial producer prices fell by 0.3% in August, after gaining for two straight months. The figure was better than market estimates of a 0.1% decline. On a yearly basis, producer prices declined 0.6% in August, logging the first annual easing since November 2024.
The HCOB Eurozone composite PMI rose to 51.2 in September, from 51.0 in the previous month. This marked the fastest growth in private sector activity since May 2024. The region’s services PMI surged to 51.3 in September, from 50.5 in the previous month.
The recent data from Eurostat confirmed Eurozone inflation accelerated to 2.2% in September, from 2.0% in the previous month.
Strength in the US dollar weighed on the EUR/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose 0.4% to 98.12 this morning.
The EUR/USD pair fell around 0.3% to 1.1711 this morning.
What to watch: Data on Eurozone’s retail sales will be released today (1300 UAE Time). Retail sales in the Eurozone, which declined by 0.5% in July following a 0.6% gain in the previous month, are expected to grow by 0.1% in August.
Other Markets: Asian trading indices mostly rose this morning, with the Asian Dow, Japan’s Nikkei 225, China’s Shanghai Composite and India’s Sensex up by 0.35%, 4.45%, 0.52% and 0.22%, respectively, and Hong Kong’s Hang Seng down by 0.61%.
Russia’s Ministry of Defence said its forces hit military-industrial facilities and energy infrastructure in Ukraine. The news sent the RUB/USD pair higher in forex trading this morning.
Vietnam’s economy expanded at an annual rate of 8.22% in the third quarter, up from 7.96% growth in the previous quarter, which lent support to the VND/USD forex pair.
Egypt’s S&P Global PMI fell to 48.8 in September, from 49.2 in the previous month. The latest reading being the seventh straight month of decline in non-oil private sector activity sent the EGP/USD pair lower in forex trading this morning.
Saudi Arabia’s Riyad Bank PMI surged to 57.8 in September, from 56.4 in the previous month. The non-oil private sector recording the fastest expansion since March lent support to the SAR/USD forex pair.
Canada’s S&P Global services PMI declined to 46.3 in September, from 48.6 in August. This being the weakest reading in three months sent the CAD/USD pair lower in forex trading this morning.
UK’s new car sales (1200 UAE Time) and S&P Global construction PMI (1230 UAE Time), Mexico’s consumer confidence (1600 UAE Time), France’s 12-month BTF auction (1700 UAE Time), 3-month BTF auction (1700 UAE Time) and 6-month BTF auction (1700 UAE Time), US 3-month Bill auction (1930 UAE Time) and 6-month Bill auction (1930 UAE Time), as well as Brazil’s balance of trade (2200 UAE Time).
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