Global markets flip-flop as investors wait for official end to U.S. government shutdown

Global markets were swinging in different directions on Wednesday, as investors stayed on edge waiting for confirmation that the U.S. government shutdown was officially over.

According to CNBC, the day’s trading showed no clear conviction from Wall Street to Europe, with some piling into risk-off assets while others kept poking around for discounts in sectors that had been ignored.

By Tuesday night, Dow Jones futures barely nudged, rising just 3 points, a pathetic 0.01%. S&P 500 and Nasdaq 100 futures were no better, crawling up by less than 0.1%.

The real move came earlier, when the Dow Jones Industrial Average exploded upward by more than 550 points, ending at a new record. But while the Dow cheered, the Nasdaq Composite quietly bled out.

The S&P 500 managed a third straight positive close, but this was a rotation, a retreat from what had been working to what hadn’t.

Dow rockets while tech stalls, Europe climbs

On CNBC’s Power Lunch, Craig Johnson, chief market technician at Piper Sandler, broke it down. “When you have very few groups making new highs, very few stocks remaining above their 200-day moving average or 40-day moving average… it’s a very interesting rotation,” Craig said.

Over in Europe, major indexes opened strong, with the Stoxx 600 Index instantly surging by 0.6% and London’s FTSE 100 increasing by 0.2%, while Germany’s DAX jumped 1%.

France’s CAC 40 added 0.7%, while Italy’s FTSE MIB climbed 0.9%, officially closing at its highest level since 2001 after breaking through its 2007 peak. Most major sectors were green across the board.

The gold trade cooled off a bit. Spot prices hovered around $4,104 per ounce, down 0.5% at press time, after climbing earlier in the day. The metal had roared past $4,380 last month, but now it’s retracing.

Traders are taking profits. Some feared the rally had gone too far, too fast. Gold-backed ETFs saw three straight weeks of withdrawals. Still, gold is up more than 55% this year, tracking for its best annual gain since 1979.

Gold cools, dollar edges up, oil loses steam

Charu Chanana, chief investment strategist at Saxo Markets, expects the story isn’t over yet. “We could see more broadening of the US equity market as flows are diverted from overbought assets, such as gold and AI names, to those that have been out of favor,” Charu said.

She believes a period of consolidation will likely follow for bullion, with another rally not expected until 2026.

Meanwhile, the Bloomberg Dollar Spot Index gained 0.1%. The yen weakened to 154.82 per dollar, its lowest point since February, before Japan’s finance minister Satsuki Katayama stepped in to stop the bleeding.

The British pound fell 0.2% to $1.3121, while the euro slid 0.1% to $1.1575. On the other hand, the Australian dollar moved up 0.2% to $0.6538, and the New Zealand dollar held steady at $0.5655.

In commodities, Brent crude fell 32 cents to $64.84 a barrel by 08:43 GMT, reversing part of Tuesday’s 1.7% gain. West Texas Intermediate dropped 35 cents to $60.69 a barrel, after a 1.5% rise in the previous session.

Profit-taking and cautious sentiment about energy demand kept pressure on oil.

So that’s about it. Markets right now are anything but sure. No one’s committing until someone from Capitol Hill stands up and says the shutdown’s actually done.

Until then, the money will keep flowing in nervous directions, chasing safety one moment and opportunity the next.

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