Investors can’t stop watching the Federal Reserve this year as it continues slicing interest rates to stimulate the slowing economy. According to The Wall Street Journal, the latest rate cut pushed borrowing costs to their lowest point in nearly a decade, sparking both optimism and anxiety across Wall Street. Discover Next: I’m a Self-Made Millionaire: Here’s How I Use ChatGPT To Make a Lot of Money Read More: Mark Cuban Says Trump's Executive Order To Lower Medication Costs Has a 'Real Shot' -- Here's Why ...

Benzinga and Yahoo Finance LLC may earn commission or revenue on some items through the links below. President Donald Trump suggested Tuesday that Americans could soon receive direct cash payments funded by skyrocketing tariff revenues—a signal that his hardline trade strategy might evolve into an economic stimulus tool ahead of the 2026 midterms. Has The U.S. Government Raised Revenue From Tariffs? Yes The U.S. Treasury amassed a stunning $267.7 billion in tariff revenues during the second quarter alone ...

Core Insights - Gold prices have surged significantly, with bullion rising past $3,977 an ounce, driven by political instability and economic uncertainty [2][3][5] - The US government shutdown has deprived investors of crucial economic data, contributing to the bullish sentiment towards gold [3][5] - Central banks, particularly the People's Bank of China, have been active buyers of gold, extending their purchasing streak for 11 consecutive months [7] Economic Factors - The stronger US dollar has impacted gold prices, making it more expensive for international buyers [2][4] - The Federal Reserve's anticipated interest rate cut is expected to further benefit gold, as it does not yield interest [3][6] - Political upheaval in France and Japan has raised fiscal concerns, bolstering the dollar against other currencies and contributing to gold's rally [4][5] Market Sentiment - There is a growing perception among investors that gold is becoming a safer asset compared to the dollar, indicating a shift in market sentiment [6] - Goldman Sachs has raised its gold price forecast for December 2026 to $4,900 an ounce, reflecting optimism driven by ETF inflows and central bank purchases [7] - Investment strategies are suggesting an overweight allocation in gold as a hedge against the US dollar, with recommendations for portfolio allocations to increase to around 5% [8]

Market Overview - A potential U.S. government shutdown is creating uncertainty in the markets, overshadowing a strong third quarter for global markets [1][2] - Wall Street stock futures have pulled back slightly after reaching record highs, with Treasury yields drifting lower due to concerns over government spending [4] U.S. Economic Indicators - The monthly jobs report is likely to be postponed, leading to a data vacuum that could impact market sentiment [1] - Vice President JD Vance indicated a high likelihood of a government shutdown, which could disrupt various services [2] Global Market Reactions - China's markets are optimistic despite a negative official business survey indicating a sixth month of contraction in factory activity, with investors awaiting a Communist Party meeting for economic plans [5] - European markets experienced a slight pullback, with inflation numbers in Germany coming in higher than expected and jobless totals decreasing [5] Commodity and Currency Movements - Gold and oil prices have slightly decreased following President Trump's peace plan for Gaza, although the immediate market impact is limited [5] - The Japanese yen has strengthened ahead of a potential interest rate rise, while the Australian dollar increased as the Reserve Bank of Australia maintained rates [4][5]

Core Insights - China's manufacturing activity contracted for the sixth consecutive month in September, indicating a need for further stimulus to enhance domestic demand and clarity on U.S. trade relations [1][2] - The official purchasing managers' index (PMI) increased to 49.8 in September from 49.4 in August, remaining below the growth threshold of 50 but surpassing the median forecast of 49.6 [1][2] Manufacturing Activity - The prolonged slump in manufacturing highlights the dual pressures on China's economy: weak domestic demand recovery post-pandemic and the impact of U.S. tariffs on Chinese factories and foreign firms [2] - A private-sector survey indicated the fastest expansion since March, driven by rising new orders and increased production, including a rise in new export orders [2][3] Survey Differences - The official PMI focuses on large- and medium-sized firms targeting domestic sales, while the private-sector PMI includes a higher proportion of export-oriented companies [3] Economic Momentum - Economic momentum in China is characterized by fluctuations, with a strong first quarter due to early stimulus, a slower midyear, and an anticipated fourth-quarter rebound as government support measures are expected to ramp up [4] Market Reactions - Markets remained stable following the data release, with attention on policymakers' near-term stimulus plans and an upcoming Communist Party meeting to outline China's social and economic development for the next five years [5] Policy Measures - Policymakers introduced consumer loan subsidies in mid-August, which were validated by separate factory output and retail sales data showing the weakest growth in 12 months [6] - The governor of the People's Bank of China indicated that various monetary policy tools are available to support the economy, but did not follow the U.S. Federal Reserve in cutting rates [7]

Group 1: Current Oil Market Conditions - Energy markets are experiencing bearish sentiment with Brent crude trading at $69.45 per barrel, over $10 below this year's peak of approximately $81 per barrel, and WTI crude at $65.05 per barrel compared to a January peak of $78.71 per barrel [1] - Oil prices in 2025 are projected to be around $15 per barrel lower than the previous year due to oversupply fears from OPEC+ unwinding production cuts, sluggish global economic growth, and heightened trade tensions [1] - Wall Street analysts warn of a potential surplus in oil markets, with Goldman Sachs predicting an oversupply of 1.9 million barrels per day in 2026 [1] Group 2: Contrasting Predictions - Commodity analysts at Standard Chartered predict that oil prices will rise in the coming year due to robust demand and economic stimulus measures [2] - StanChart acknowledges that U.S. supply has reached an all-time high but anticipates that producers will need to cut output due to low oil prices [3] Group 3: Demand and Geopolitical Factors - Expectations of weaker global demand in the final quarter of the year, influenced by trade wars and tariffs, may lead to economic stimulus measures in the U.S. and potential responses from China [3] - Ukraine's attacks on Russian energy infrastructure have resulted in increased crude exports from Russia, reaching a 16-month high of 3.62 million barrels per day in August [3] - Escalating tensions between Europe and Russia are likely to raise the risk premium for crude oil and natural gas [3]

Core Points - The People's Bank of China (PBOC) has maintained its benchmark lending rates unchanged for the fourth consecutive month, with the one-year loan prime rate (LPR) at 3.0% and the five-year LPR at 3.5% [2][3][4] - This decision aligns with economists' expectations, as Chinese authorities are refraining from major stimulus measures despite signs of economic fatigue [3][5] - The PBOC's last rate cut occurred in May, where key lending rates were reduced by 10 basis points as part of efforts to support the economy [3][4] Economic Context - China's export growth slowed to 4.4% in August, the lowest rate since February, influenced by waning frontloading shipments and U.S. trade policies [5] - Policymakers are anticipated to implement marginal monetary easing later this year to achieve the government's annual growth target of around 5% [5]

Group 1 - The Federal Reserve is expected to cut its key interest rate by 25 basis points to the 4.00%-4.25% range, with further easing anticipated through the end of next year [2][3] - Global shares and gold have reached unprecedented highs due to expectations of a dovish Fed stance, while U.S. Treasuries and the dollar have weakened [3] - The Bank of Canada is also expected to cut rates amid trade frictions affecting labor markets [4] Group 2 - Japan's exports have declined for the fourth consecutive month, indicating the impact of tariffs imposed by the Trump administration on major economies [5] - Asian markets showed initial subdued performance but later improved, led by a 1.4% increase in Hong Kong's Hang Seng Index [5] - Key economic data releases include U.S. housing starts, British CPI, Euro zone CPI, and Germany's government debt auctions [6]

Economic Performance - China's GDP grew by 5.2% in Q2 2025, surpassing the 5.1% forecast by economists, but down from 5.4% in Q1 [2] - The stronger-than-expected growth has alleviated immediate pressure on policymakers to implement further economic stimulus [1][3] Policy Outlook - Analysts suggest that additional stimulus measures may be delayed until September if economic momentum weakens further [3] - Previous stimulus efforts have shown partial effectiveness, with improvements in manufacturing activity and exports [4] Trade Relations - U.S. tariffs on Chinese imports were escalated to 145% in April, leading to supportive measures from Beijing [5] - A truce was reached in May, with both countries agreeing to roll back most tariffs, followed by a framework agreement in June [6] Economic Vulnerabilities - Economists have called for stronger fiscal action, recommending up to 1.5 trillion yuan in stimulus to support household spending and mitigate the impact of U.S. tariffs [7] - Despite signs of resilience, underlying vulnerabilities in the Chinese economy remain a concern [8] Investment Opportunities - Investors are encouraged to monitor China-based exchange-traded funds (ETFs) such as iShares MSCI China ETF (MCHI) and KraneShares CSI China Internet ETF (KWEB) [9]

Group 1: Market Impact - U.S.-listed Chinese companies such as Alibaba, PDD Holdings, Baidu, NIO, Li Auto, and XPeng are experiencing a decline in stock prices due to new tariffs imposed by the Trump administration, which can reach as high as 245% on certain imports [1] - The trade war has led to a selloff of heavily foreign-owned Chinese tech stocks, with e-commerce firms being the most affected by the increased tariffs on small parcels [6] Group 2: Economic Growth and Forecasts - China's GDP grew by 5.4% in the first quarter, surpassing the analyst estimate of 5.2%, driven by consumer subsidies and strong export shipments [2] - Economists from major international banks, including UBS and Goldman Sachs, have reduced their forecasts for China's 2025 growth to approximately 4% or lower, indicating a potential struggle to meet the growth target of around 5% [4] Group 3: Tariff Dynamics - The tariff war began with a 20% tariff imposed by Trump, escalating to 104% and then to 125% in response to China's retaliatory actions, which included raising its tariffs by 84% [5][6] - The tariffs are expected to lead companies to increase product prices to maintain margins, which could negatively impact demand for lower-priced offerings from Chinese companies [5]