By Mike Dolan
-What matters in U.S. and global markets today
By Mike Dolan, Editor-At-Large, Finance and Markets
With the U.S. government now reopening after a six-week hiatus, market attention switches to the release of delayed economic data over the next week, as the bar for another Federal Reserve interest rate cut this year appears to be rising.
Fed futures pricing for a December rate cut is now little more than 50-50, with regional Fed officials on the central bank’s policy committee signaling a pause until the foggy data picture clears up. The September national payrolls report may hit as soon as next week, but there are doubts about whether October jobs and inflation numbers will ever be released due to data collection issues.
Boston Fed boss Susan Collins, a voter on the FOMC this year and considered a ‘centrist’, was the latest to sound a note of caution. “Absent evidence of a notable labor market deterioration, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown,” she said.
Despite the Fed doubts and Wednesday’s lackluster 10-year note auction, Treasury yields remained under wraps. Treasury Secretary Scott Bessent insisted auction sizes of longer-term debt would remain unchanged for the next several quarters and advocated easing banks’ so-called supplementary leverage ratios that discourage them from holding Treasuries.
A sharp retreat in crude oil prices helped too. U.S. crude prices fell to their lowest in three weeks as OPEC and the International Energy Agency signaled a surplus in global oil supplies through next year.
The dollar weakened overnight, most clearly against the euro and China’s yuan. Intervention concerns lifted Japan’s yen from nine-month lows the previous day, when Japan’s Prime Minister Sanae Takaichi warned the Bank of Japan not to lift rates too quickly.
But broader yen weakness was evident as it touched a record low against the euro, which also firmed to its highest of the month against the dollar.
Back on Wall Street, stocks held steady on Wednesday – with a rotation of sectors seeing Dow Jones Industrials clock a new record but the tech-heavy Nasdaq ending in the red again.
Even though AMD rallied 9% after the chip designer unveiled a $100 billion data-center revenue target and IBM touched a new record on quantum computing breakthroughs, other tech bellwethers such as Amazon, Tesla, Palantir and Oracle all fell back amid valuation concerns in the sector.
U.S. index futures were flat to negative before Thursday’s bell, but global stocks were more buoyant and MSCI’s all-country index hit a new record. Chinese stocks outperformed ahead of Friday’s major economic releases there, with an earnings beat from social media giant Tencent helping and the yuan hitting its best levels since October.
In today’s column, I take a look at why markets appear to be so calm heading into year-end despite all the political and trade policy turbulence experienced throughout 2025.
Today’s Market Minute
* President Donald Trump on Wednesday signed legislation ending the longest government shutdown in U.S. history, hours after the House of Representatives voted to restart disrupted food assistance, pay hundreds of thousands of federal workers and revive a hobbled air-traffic control system.
* China’s securities watchdog chief, Wu Qing, has sought approval to step down, people with knowledge of the matter said, in what would be an abrupt and unexpected exit for a regulatory head brought in last year to stabilise the country’s stock markets.
* Investors laid a record wager on Japan’s yen rising to take advantage of a long-overdue economic revival that coincided with expectations for a U.S. slowdown.
Instead, what’s unfolded is a cautionary tale of the Trump era.
* The reopening of the U.S. government means official economic data will soon be forthcoming. But the end of the shutdown should not be confused with a return to economic clarity, argues ROI markets columnist Jamie McGeever.
* Chevron’s latest strategy update shrugs off concerns about oil oversupply in the near term and exudes confidence in the long-term outlook for fossil fuels, brushing aside doubts that hovered over the industry only a few years ago. Read the latest from ROI energy columnist Ron Bousso.
Chart of the day
Yen weakness against the dollar drew warnings from officials in Tokyo this week about excessive moves, but Japan’s currency continues to weaken more broadly on the government’s loose fiscal and monetary policy leanings and hit a record low against the euro on Thursday.
Today’s events to watch
* St. Louis Federal Reserve President Alberto Musalem, Cleveland Fed President Beth Hammack and San Francisco Fed chief Mary Daly all speak; European Central Bank Board member Sharon Donnery and ECB chief supervisor Claudia Buch both speak
* U.S. Treasury sells $25 billion of 30-year bonds
* U.S. corporate earnings: Walt Disney, Applied Materials
* European Union finance ministers meet in Brussels, with European Central Bank Vice President Luis de Guindos attending
* Nicolai Tangen, CEO of Norges Bank Investment Management, addresses the Economic Club of New York
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Opinions expressed are those of the author. They do not reflect the views of Reuters News, which, under the Trust Principles, is committed to integrity, independence, and freedom from bias.
(Editing by Andrew Heavens)
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