Stocks end Third Quarter on High Note as Dow Clinches Record, Big Tech Extends Gains as AI Trade Rolls on

Stocks

Economic

Summary:

On Tuesday, the S&P 500 and Nasdaq each logged their best third quarter since 2020 and strongest September since 2010, as tech stocks continued to dominate.

Markets wrapped up the third quarter on a strong note, defying September’s reputation as one of the toughest months for the US stock market.

The S&P 500 (^GSPC) and Nasdaq (^IXIC) each logged their best third quarter since 2020 and strongest September since 2010, while the Russell 2000 (^RUT) recorded its best Q3 since 2009 as the Federal Reserve kicked off its rate-cutting cycle. The Dow Jones Industrial Average (^DJI) closed at a record high.

Over the past three months, the benchmark index climbed nearly 8%, led by outsized gains in the Technology (XLK) and Consumer Discretionary (XLY) sectors — a rally that underscored investor confidence in the economy’s resilience, even as sentiment sours amid shutdown concerns.

Still, Wall Street isn’t overly concerned that the looming shutdown will derail the market’s recent string of record highs.

“Investors need to do nothing,” said Omar Aguilar, CEO and chief investment officer at Schwab Asset Management, noting that any market volatility would hinge on "the length of the shutdown" and the subsequent impact on data visibility for the Fed. “Once this all gets cleared out, things will come back to normal.”

"Normal," of course, has changed from recent market cycles as today's tech boom powers valuations to levels last seen during the dot-com bubble.

Among the quarter's standout performers in the index were AppLovin (APP), Robinhood (HOOD), Western Digital (WDC), and Seagate (STX), names outside the Magnificent Seven that show how AI enthusiasm is broadening beyond the megacaps.

But the heavyweights held their own: Nvidia (NVDA) gained nearly 20% over the last three months while the once downbeat Intel (INTC) surged around 50%. Oracle (ORCL) stock gained over 30% in the quarter after landing a $300 billion cloud-compute contract with ChatGPT parent OpenAI, which sent shares up over 30% in a single day in early September.

“We're in batting practice of a double header as it relates to the AI revolution,” Kevin Mahn, chief investment officer at Hennion & Walsh, told Yahoo Finance on Tuesday. “Batting practice is the AI infrastructure buildout. The games will ultimately involve the implementation of these AI algorithms that will transform the economy and society, and likely lead to returns on investment. But that's years down the road."

On Tuesday, the S&P 500 and Nasdaq each logged their best third quarter since 2020 and strongest September since 2010, as tech stocks continued to dominate.

The famous architecture of New York City in the USA with the iconic Wall Street bull standing fast next to the New York Stock Exchange building.

According to DataTrek Research, the 10 largest tech and tech-adjacent companies now make up nearly 39% of the S&P 500, up 2 full percentage points since the start of the year.

That's equivalent to the combined weight of both the Real Estate (XLRE) and Materials (XLB) sectors within the S&P 500.

That leadership comes at a premium, however. The top nine tech names (excluding Tesla) trade at 36.5x forward earnings, versus 24.8x for the broader index. But investors appear willing to pay up, with earnings for those companies expected to grow nearly 19% next year, roughly 40% faster than the rest of the S&P 500.

That strength carried through to sector performance, with Technology leading the way — up more than 11% for the quarter — and Consumer Discretionary not far behind.

One obvious laggard? Consumer Staples (XLP). The companies behind everyday essentials like toothpaste and paper towels made up the only S&P 500 sector to finish the quarter in the red, down more than 3%.

Notable names such as Coca-Cola (KO), Costco (COST), and Colgate-Palmolive (CL) all moved lower over the past three months as investors rotated back into growth. That marks a sharp reversal from earlier in the year, when tariff concerns sent investors fleeing high-growth names for more defensive plays.

Source: Yahoo Finance

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Manuel

Economic

Political

President Donald Trump threatened mass firings of federal workers as the US hurtles toward a shutdown with Democrats and Republicans at an impasse over funding the government.

“We may do a lot and that’s only because of the Democrats,” Trump said in response to a question about the number of government employees who could be dismissed during a shutdown. The White House last week directed agencies to draw up plans for widespread firings if the government closed down. So far, no agencies have explicitly called for terminations in their shutdown plans.

With just hours to go until a midnight deadline, the deadlock over spending threatens to paralyze many US government operations for the first time in nearly seven years, causing the suspension of services for Americans and paychecks for federal workers. As many as 750,000 federal workers could be temporarily furloughed, even if Trump doesn’t proceed with permanent dismissals, the nonpartisan Congressional Budget Office estimated.

Political fallout could be widespread for both Trump and Democrats ahead of next year’s critical midterm elections, and leaders of both parties focused their public comments on blaming the other.

“They want to try to bully us — they are not going to succeed — into taking their partisan bill,” Senate Democratic Leader Chuck Schumer said Tuesday. “That’s why we are heading into a shutdown.”

Democrats “are taking a risk by having a shutdown,” Trump said at a mid-day Oval Office event. “We’re not shutting it down. We don’t want to shut it down because we have the greatest period of time.”

Asked about chances of a shutdown, he responded, “Nothing is inevitable, but I would say it’s probably likely.”

House Speaker Mike Johnson, a Louisiana Republican, similarly predicted that a shutdown is imminent.

“I’m an optimist, but I’m a little skeptical this morning,” he told CNBC Tuesday.

Although last-minute spending deals have averted several other threatened shutdowns in recent years, the stakes are especially high now, with the White House threatening to fire employees rather than furlough them, and Democratic leaders under intense pressure from progressives in the party to stand up to Trump.

Stocks fluctuated Tuesday morning with the prospect of a shutdown stoking concerns about how long it’ll go on and what impact the possibly delayed release of key economic data will have on the Federal Reserve’s upcoming interest-rate decisions.

Johnson accused Democrats of playing politics with their effort to renew health-care tax credits, saying it doesn’t have to be resolved until the end of the year when the tax credits expire.

“Open the government and then we’ll have all the discussions,” he said. “But right now that is a red herring.”

House Democratic Leader Hakeem Jeffries accused Republicans of being unwilling to participate in bipartisan negotiations, telling CNBC Tuesday that his party refuses to be a part of “a my-way-or-the-highway” approach.

Republicans in recent days have repeated the phrase “Schumer shutdown” in an attempt to pin the blame on their Democratic opponent.

“Chuck Schumer needs a Schumer shutdown and I think that’s what we’re probably careening toward,” Senate Republican Leader John Thune told CNBC on Tuesday.

Deep Divide

Lawmakers appeared no closer to a deal after a Monday meeting at the White House only served to underscore their deep divide. Democrats have sought an extension of health-care subsidies and a reversal of Medicaid funding cuts that were part of Trump’s signature tax legislation enacted earlier this year. Republicans are insisting on what they call a clean continuing resolution — without an array of controversial policy measures — that would extend government funding until Nov. 21.

Thune told reporters the Democrats’ push amounted to a “hostage taking.” While there is an opportunity to discuss potential health-care premium tax credit changes with Democrats, Thune said, “we can’t even have that discussion until we keep the government open.”

Until then, Thune said the Senate will take repeated votes on a short-term spending bill to reopen the government.

Senator John Barrasso, a member of Senate Republican leadership, said the chamber would take a break for the Yom Kippur holiday this week if there is a shutdown but then return to Washington and vote through the weekend. Trump Threatens "A Lot" Of Firings as Shutdown Deadline Nears_1

Trump Threatens "A Lot" Of Firings as Shutdown Deadline Nears_1

If the president was seeking to curry Democratic votes, it wasn’t immediately apparent. Trump, who last week canceled a planned sit-down with Democratic leaders, on Monday evening posted a poorly dubbed video on social media of Schumer and Jeffries, set to mariachi music, suggesting the pair wanted to import new voters who “can’t even speak English.”

Schumer sniped back that the president is “trolling away on the internet like a 10-year-old.” Jeffries called the depiction of him in a sombrero “racist” and dared Trump to insult him to his face.

Trump ally Sean Hannity, on Fox News, suggested to Johnson that there was no chance Trump would give into any of the Democrats’ demands, and Johnson agreed. Meanwhile, on Capitol Hill, Democrats cheered party leaders in a closed-door meeting Monday evening that appeared to rally the troops.

Exit Ramps

A shutdown would be the first since 2018-2019, when funding for the government lapsed for five weeks, including over New Year’s Day, during Trump’s first term.

Although Republicans control both chambers of Congress — as well as the White House — they appear to need the support of at least seven more Senate Democrats to clear procedural hurdles and pass a funding bill.

One possible path being discussed late Monday involves a potential compromise that would extend health-care tax credits but phase down the amounts in the second and third year.

GOP lawmakers expressed confidence that, even if the government shut down briefly, Democrats would eventually yield.

“A 600-pound man is more likely to pass up a donut than the Democrats are to shut down the government for any length of time, because they love the government as much as a 600-pound man loves a donut,” said Senator Lindsey Graham, a Republican from South Carolina.

Graham said he expected a “brief” shutdown while Republicans and Democrats find “common ground.” He pointed out that Republicans have previously tried to use shutdowns to extract policy concessions, only to eventually give up and fund the government without getting anything in return.

“It may be popular, but shutting the government down is not the answer to popular legislation,” Graham said. “I’ve learned that the hard way.”

Source: Bloomberg

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Manuel

Commodity

It's not just gold (GC=F) notching a strong quarter as a potential government shutdown looms.

Silver futures (SI=F) are up 27% over the past three months, versus gold's more than 15% rise, and roughly 58% year to date compared with the yellow metal's 45%.

On Tuesday, gold futures held near record highs above $3,875 an ounce while silver futures traded around $46. The metal was within striking distance of its closing high of $48.70 — just north of $150 in today's dollars — set in January 1980. That was during a famed silver squeeze, when the infamous Hunt brothers tried to corner the market.

"Silver is in a fundamental deficit with demand outstripping supply," Sprott Asset Management senior portfolio manager Shree Kargutkar told Yahoo Finance. "This development is being picked up by investors who are adding to their holdings through ETFs (exchange-traded funds) as well as physical silver."

Sprott remains bullish on the metal, highlighting its industrial demand across sectors, from electronics to medical applications.

Silver's hockey stick rally comes as gold has dominated the spotlight this year, driven by expectations of Federal Reserve easing and robust foreign central bank demand, with holdings recently surpassing US Treasurys for the first time since 1996.

On Monday, Goldman Sachs analysts pointed to their bullishness on gold amid a "goldilocks regime" — not too hot, not too cold, in other words — for the broader market.

The analysts expect gold to reach $4,000 by mid-2026, though increased trades into the space "might create near-term more bumpiness.

Earlier this month, analysts at the firm said gold was their "highest-conviction long recommendation," outlining an upside scenario of $5,000 by the end of next year amid rising concerns over Federal Reserve independence, as President Trump aims to place dovish governors at the central bank.

Along with gold and silver, precious metals palladium (PA=F) and platinum (PL=F) have rallied 44% and 79%, respectively, in 2025 amid a weaker greenback trend.

The US dollar index is down about 10% year to date, making commodities priced in dollars cheaper for buyers using other currencies

Barclays head of global asset allocation Nikola Vasiljevic recently noted that precious metals have historically been standout winners during periods of dollar weakness

"Data shows that this asset class has delivered real annualized returns of around 15% on average, and this is because they act as a direct hedge, being a traditional store of value," Vasiljevic said.

Source: Yahoo Finance

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Manuel

Cryptocurrency

Chainlink has developed a new system with Swift and UBS that enables banks and asset managers to process tokenized fund subscriptions and redemptions through the same messaging infrastructure they already utilize.

The solution could accelerate digital asset adoption in the $100 trillion global fund industry by removing a critical technical barrier, according to the Sept. 30 announcement.

Pilot with UBS Tokenize

The initiative builds on Chainlink, Swift, and UBS’ earlier collaboration in the Monetary Authority of Singapore’s Project Guardian in 2024, which tested tokenized asset settlement using off-chain cash.

In the latest pilot, UBS Tokenize, the bank’s tokenization unit, successfully processed fund subscription and redemption requests.

Messages sent in Swift’s ISO 20022 format were routed through Chainlink’s Runtime Environment (CRE), which then triggered onchain smart contract actions using Chainlink’s Digital Transfer Agent standard.

By relying on existing Swift infrastructure, institutions do not need to overhaul their identity or custody systems to interact with blockchain networks.

The “plug-and-play” model allows institutions to experiment with tokenized funds without the cost and complexity of building entirely new systems.

Implications for the fund industry

The ability to manage tokenized workflows directly from legacy infrastructure could be transformative for the global asset management sector, which is under pressure to modernize operations and cut costs.

Using Swift to trigger onchain events reduces reconciliation work, enhances compliance automation, and increases transparency, according to Chainlink.

Chainlink co-founder Sergey Nazarov said the collaboration demonstrates how smart contracts and new technical standards can bring greater efficiency to the asset lifecycle.

Meanwhile, UBS is demonstrating how banks can utilize tokenization to enhance existing products and explore new distribution models.

Tokenization of funds has become a focus for financial institutions and regulators as firms seek ways to enhance settlement speed, mitigate operational risk, and unlock new forms of market flexibility.

Advances like the Chainlink-Swift integration could help move tokenization from isolated pilots to broader adoption across global capital markets.

Source: Cryptoslate

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Manuel

Economic

Forex

The looming US government shutdown is a clear risk for the dollar.

In the three most recent episodes — in 2013, early 2018 and late 2018 into 2019 — the Bloomberg Dollar Spot Index drifted lower both during the impasse and in the immediate aftermath.

The threatened shutdown is adding to a number of challenges that have kept the dollar under pressure this year — including a new cycle of US interest-rate cuts that kicked off this month and attacks on the Federal Reserve’s independence by the Trump administration.

The 35-day closure of federal operations that began in December 2018 delivered the most pronounced bout of dollar weakness — showing the dollar would suffer more the longer the shutdown lasted. The greenback fell by around 2% during that shutdown period. This time round, the US currency is heading for a third straight daily decline, down 0.8% over the period. While the Bloomberg Dollar Spot Index is down more than 8% this year, the measure is nonetheless on pace to close September little changed on the month.

“The likelihood of the potential for a government shutdown is relatively high,” said Bill Campbell, a global bond portfolio manager at DoubleLine. A protracted closure could weigh on the dollar, he added. Dollar Weakness Is a Common Feature of Government Shutdowns_1

Dollar Weakness Is a Common Feature of Government Shutdowns_1

Implied volatility in euro-dollar options tends to rise ahead of shutdowns, underscoring that traders are quick to price in disruption risks. But realized swings tell a different story.

In 2013, spot volatility lagged and only briefly spiked once the shutdown began. In January 2018, expectations and delivery lined up, with realized volatility tracking implied almost one-on-one. By contrast, during the prolonged 2018/19 closure, options priced in turbulence that never fully materialized, as realized volatility stayed subdued through much of the impasse.

It’s no surprise that options sentiment over the next month has shifted back to neutral on the dollar, erasing last week’s modest bullish bias.

“Given greater market sensitivity to US political developments, we would expect modest dollar weakness against the yen, Swiss franc, and euro should a shutdown materialize,” Citigroup strategists Daniel Tobon, Brian Levine and Osamu Takashima wrote in a Sept. 29 note. “However, a quick resolution to the shutdown could lead to limited follow-through, keeping us in similar ranges to recent months.”

By Tuesday afternoon, a shutdown appeared increasingly likely. That would delay the release of key economic indicators, including the monthly employment report scheduled for Friday.

At JPMorgan, strategist Patrick Locke said that the possible shutdown gives “an added layer of significance” to other economic data, including Conference Board, job openings, ISM and ADP figures. August job openings released Tuesday were little changed while hiring was dampened, signaling a steadily slowing demand for workers.

Source: Bloomberg

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Kevin Du

Central Bank

Bank of England Deputy Governor Sarah Breeden cautioned on Tuesday that maintaining high interest rates for an extended period could harm the economy and push inflation below target.

"Holding policy too tight for too long comes with costs to output and employment, which could then pull inflation below target," Breeden said in a speech at Cardiff Business School.

Breeden, who was part of the majority that voted to keep rates at 4% during the September Monetary Policy Committee meeting, noted that the recent rise in headline inflation was likely temporary. The central bank expects inflation to reach 4% in September.

She described the recent inflation increase as a "hump" that was unlikely to generate additional inflationary pressure in the economy. Breeden added that the underlying disinflationary process appears to be on track, though policymakers face a balancing act.

The deputy governor expressed some concern about the significant rise in household inflation expectations since the lows of 2024. She warned that if expectations continue to increase alongside further food price rises, this "could be a cause for concern."

The Bank of England is currently weighing inflation concerns against signs of slowing economic growth as it determines its future interest rate policy. The central bank had previously cut rates by 25 basis points in August before holding steady in September.

Source: Yahoo Finance

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Golden Gleam

Economic

Commodity

Owing to uncertainties on higher inflation and muted growth in the United States (US), coupled with concerns around America’s rising debt and tariffs imposed by President Donald Trump, the world’s largest economy has become the epicentre of an unabated record rally in prices of precious metals.

While prices of gold and silver have been going up in the past two years, the first six months (H1) this financial year (FY26) have seen strong gains.

In H1FY26, international gold has returned 22.1 per cent, the highest in any first half in at least 30 years.

Likewise, silver has returned 35.8 per cent, the best in three decades after the 66.3 per cent gain in the first half of 2020-21, when the pandemic came.

The returns are based on prices as on September 30, 5.40 pm.

In rupee terms, gold is up 29.5 per cent in H1FY26, again the highest first-half return in the past three decades, while silver gave 43.1 per cent, the best after the first half of the lockdown year’s 53 per cent gain.

On Tuesday, however, the gold and silver rally paused, with prices marginally correcting.

After reaching an all-time high of $3,871 an ounce in morning trade, gold prices corrected and the yellow metal was trading around $3,815. Silver corrected from $47.1 an ounce and was trading around $46.3, a little away from its all-time high of $49 per ounce.

In Mumbai’s spot market, the 995-purity 24-carat gold closed at nearly ₹1.15 lakh per 10 gm (down from the opening price of about ₹1.16 lakh) while silver closed at more than ₹1.42 lakh per kg (down from ₹1.45 lakh in morning trade), in line with international prices.

The major reason for the recent rally in precious metals, especially gold, is the looming US government shutdown. Its record debt of $37.5 trillion is difficult to finance, and the recent meeting between representatives of the Trump administration and the US Congress did not produce any result.

Shutdown fears in 1971 had led the Richard Nixon administration to suspend the dollar’s convertibility into gold. For the past few months, the US Federal Reserve’s rate hike, looming inflation, the government’s comments against US Fed officials and geopolitical uncertainties in West Asia have boosted the rally in precious metals.

Globally, central banks have also been big buyers of gold.

Chirag Thakkar, director, Amrapali Gujarat, who has been recommending silver for a few months, said: “Silver now looks overbought and a correction is expected before the rally takes it to another new high.”

Thakkar, however, said high demand for silver from industry and investors had resulted in the market turning into a premium of 50 cents in India, while adding that ready delivery was difficult to get.

A leading trader said globally too electric-vehicle manufacturers were big buyers of silver, which is required for battery manufacturing, supported by demand from solar panel makers and investors.

While silver is in big demand, local demand for gold at present is weak. Customers are buying coins and exchanging old jewellery for new. Jewellers are worrying about Diwali demand.

But there is optimism. Rajesh Rokde, chairman, All India Gem and Jewellery Domestic Council, said: “As we approach Diwali, I expect demand to rise significantly, particularly for lightweight and investment-grade pieces or coins. We are projecting a 12–15 per cent growth in gold sales this year, which reflects both traditional buying and evolving consumer preferences.”

Jewellers are looking for non-traditional ways to market gold, Rokade said.

“This year we’re engaging Gen Z buyers through digital campaigns, influencer collaboration, and showcasing contemporary, eco-friendly designs. The response has been phenomenal, and we’re confident this edition will surpass expectations.”

T Gnansekar, cofounder, Commtrendz Research, a commodities risk advisory firm, said: “Gold prices may see resistance between $4,000 and $4,100 because it is difficult to avoid government shutdown in the US.” He said “silver prices may test all-time high levels of $49 per ounce multiple times before it goes further high. Silver is projected to see a level of $60 per ounce.”

The first nine months' returns on gold and silver in international markets are the highest in 45 years.

The return in the first nine months of calendar year (CY) 2025 for gold is 45 per cent, while for silver it is 59 per cent.

In the first nine months of CY1979, in the international market, gold had returned 75.8 per cent while silver almost 170 per cent.