Dow Surges on US Government Hopes – Dow up 1.2%
US equities pushed higher overnight, led by the Dow, which surged 1.18% to a fresh record close at 47,927 as optimism grew that the prolonged US government shutdown could finally end within days. The S&P 500 also gained ground, rising 0.21% to finish at 6,846, while the tech-heavy Nasdaq slipped 0.25% to 23,468 as investors rotated away from technology names. Bond markets were closed for the Veterans Day holiday, but in currency markets, the dollar edged lower, with the DXY moving down 0.12% to 99.47. In commodities, oil prices extended their recent rally, with Brent climbing 1.72% to $65.16 and WTI up 1.53% to $61.05, as traders priced in the likelihood of further US sanctions against Russia. Gold also advanced for a second session, adding 0.27% to reach $4,126.51, following Monday’s strong surge higher.
US Government Shutdown in Focus Today
The market will be keenly watching Washington, D.C., later today, with members of the U.S. House of Representatives headed back to the capital after a 53-day break for a vote that could end the shutdown. Most market participants fully expect the deal to pass through Congress and be signed by President Trump later this week, and US stocks have rallied well on that anticipation. However, what is not certain at the moment is when we will see the resumption of economic data, and whether we will have ‘catch-up’ data releases or just follow the scheduled release dates. On top of this, of course, investors will then need to see that the data follows recent patterns that will allow the well-priced-in Fed cut in December. So even though this is a great step in the right direction, there are still plenty of uncertainties ahead for the market that may see some strong corrections in the coming days.
Quiet Calendar Day Ahead for Traders
It is a quiet day ahead on the macro calendar, with no major data releases scheduled. However, traders expect volatility to remain elevated as all eyes turn to Washington for the anticipated congressional vote to end the government shutdown. There is very little of note on the calendar in the Asian session today, although we do hear from the RBA’s Assistant Governor Brad Jones, which could add some volatility to the Aussie. It is a similar situation in the European session today, with little scheduled, and so traders are expecting range-bound conditions ahead of the New York open. In addition to the congressional vote, we also have several Federal Reserve officials due to speak later in the session, with markets watching closely for any hints of a potential rate cut in Decemb
