Stocks treaded water as traders awaited Wall Street’s reopening after the long weekend for direction in what is historically the weakest month for US equities.
A gauge of Asian shares swung between small gains and losses while equity-index futures for the US and Europe edged marginally lower. Gold reached a record high Tuesday with traders positioning for an interest-rate cut by the Federal Reserve this month.
The Bloomberg Dollar Spot Index gained for the first time in six days while the Treasury curve steepened as cash trading resumed following the Monday holiday. The yield on the 10-year benchmark rose almost two basis points to 4.25%. Oil drifted higher with attention on an upcoming OPEC+ meeting.
After a selloff in technology shares on Wall Street Friday, the record-breaking stock rally faces a pivotal test this month, with jobs numbers, inflation data and the Fed’s rate call all landing within the next three weeks.
Tariff tensions and questions over the Fed’s independence are also compounding the risks in September, historically the weakest month of the year for US markets.
“With a US policy rate cut looking likely, money is shifting from the dollar to global markets,” said Kazuhiro Sasaki, head of research at Phillip Securities Japan. “Rate cut expectations are also a catalyst for rate-sensitive sectors like real estate and cyclical names,” he said.
