NEW YORK :Major stock indexes edged lower on Monday, with the S&P 500 easing after recent record highs, and investors eyeing political upheaval in France, Japan and a U.S. government shutdown, while gold futures hit $4,000 an ounce for the first time.
Gold’s rally has been driven in part by uncertainty over the U.S. shutdown. U.S. gold futures for December delivery were up 0.6 per cent at $3,998.50, after hitting a high of $4,009.00.
The euro fell against the U.S. dollar for a second day as investors awaited developments in France, where the shock resignation of Prime Minister Sebastien Lecornu on Monday raised concerns about the country’s fiscal outlook.
The week-old U.S. government shutdown continued, but major U.S. stock indexes have been posting record closing highs, helped by optimism over the likelihood of interest rate cuts from the Federal Reserve and over artificial intelligence-related dealmaking.
“With tech stocks and stocks being at all-time highs and gold being at all-time highs, something has to give,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma. “So are the nervous Nellies of gold right, or is the AI trade correct?… That’s what we’re going to find out in the weeks and months ahead.”
The Dow Jones Industrial Average fell 71.17 points, or 0.15 per cent, to 46,623.80, the S&P 500 fell 2.72 points, or 0.05 per cent, to 6,737.17 and the Nasdaq Composite rose 13.38 points, or 0.05 per cent, to 22,952.54.
MSCI’s gauge of stocks across the globe fell 1.38 points, or 0.14 per cent, to 994.68.The pan-European STOXX 600 index fell 0.02 per cent.
Paris’ CAC 40 was last up 0.1 per cent, having posted its largest one-day fall since late August on Monday.
President Emmanuel Macron, who is facing growing pressure to hold snap parliamentary elections, or even resign, has given Lecornu a chance to hold last-ditch talks with members of various parties on Tuesday to seek a way out of the crisis.
French bond yields rose 2 basis points to 3.59 per cent.
In Japan, investors snapped up a sale of government debt, in a sign of easing nervousness after Sanae Takaichi, a proponent of low rates and high spending, was elected leader of the ruling party, prompting a selloff in domestic bonds and the currency and sending stocks to record peaks.
The Japanese yen weakened 0.53 per cent against the greenback to 151.15 per dollar, while the euro was down 0.44 per cent at $1.1657.
Benchmark U.S. yields edged lower as investors awaited an auction of three-year notes and comments from Fed policymakers ahead of the U.S. central bank’s meeting later this month. The yield on benchmark U.S. 10-year notes fell 1.8 basis points to 4.144 per cent, from 4.162 per cent late on Monday.
Oil prices were lower. U.S. crude fell 0.63 per cent to $61.31 a barrel and Brent fell to $65.02 per barrel, down 0.69 per cent on the day.
Investors also digested news that the World Bank lifted its forecasts for Chinese growth in 2025 and those for much of the region, although it warned of slowing momentum next year.
(Additional reporting by Amanda Cooper in London and Rae Wee; Editing by Christopher Cushing, Kim Coghill, Louise Heavens, Alexandra Hudson and Sharon Singleton)
