The US indices fell for a third consecutive session on Thursday as investors weighed strong economic data against expectations for future Federal Reserve rate cuts. The Dow Jones (US30) dropped by 0.38%, the S&P 500 (US500) declined by 0.50%, and the tech-heavy Nasdaq (US100) closed 0.50% lower. Data showed the labor market remains resilient, with initial jobless claims falling to 218,000 for the week ending September 20. Furthermore, Q2 GDP growth was revised higher to an annual rate of 3.8%, supported by robust consumer spending and business investment. Market participants are now repricing the Fed’s next moves, with investor bets on an additional 25 basis point (bp) rate cut in October falling sharply. Technology stocks were hit the hardest, with Oracle tumbling 5% and Tesla dropping 4%. Meanwhile, Intel jumped 9% on news it approached Apple with an investment proposal. Investors are now awaiting Friday’s release of the Fed’s preferred inflation gauge, the PCE Index, for clues on the Central Bank’s path.
Mexico’s Central Bank, Banxico, cut its benchmark interest rate by 25 basis points to 7.5% on Thursday. In its statement, the Central Bank noted that global economic activity expanded at a slower pace in the third quarter of 2025 compared to the previous quarter. The bank pointed to persistent trade tensions, which are expected to cause an economic slowdown both globally and in the United States this year and in 2026. The Central Bank still projects headline inflation to reach its 3% target by the third quarter of 2026.
European equity markets declined yesterday. Germany’s DAX (DE40) fell by 0.56%, France’s CAC 40 (FR40) closed down 0.41%, Spain’s IBEX35 (ES35) dropped 0.27%, and the UK’s FTSE 100 (UK100) closed 0.39% lower. The GfK Consumer Climate Index in Germany surprisingly improved slightly for October, though it remained in negative territory. Shares of German company Siemens Healthineers fell approximately 3.5% after the US Administration announced a new national security investigation into imports of robotics, medical devices, and industrial machinery. The European Commission plans to impose tariffs of 25% to 50% on Chinese steel and related products in the coming weeks to protect domestic producers, as the global overcapacity continues to pressure profits and constrain investment in the decarbonization of the European steel industry. Analysts expect China’s steel exports to reach a record high this year, increasing by 4-9% to an estimated 115-120 million tonnes.
The US natural gas prices (XNG/USD) surged over 3% to $2.94 per million British thermal units (mmBTU), reaching a one-week high and continuing a three-session rally. The EIA reported a storage build of 75 billion cubic feet (bcf) for the week ending September 19, which matched expectations. Meanwhile, projections point to warmer-than-normal weather in early October. Feedgas flows to LNG facilities averaged 15.7 bcf/d in September, a slight reduction from August.
Silver (XAG/USD) climbed above $45 per ounce on Thursday, hitting a new 14-year high. Increased industrial demand and tight physical supply outweighed stronger-than-expected US macroeconomic data, which typically pushes up yields and the dollar. On the demand side, greater shipments of photovoltaic panels and electronics, where silver is difficult to substitute, are supporting near-term consumption. Regarding supply, most silver is produced as a byproduct of base metal mining and cannot be quickly ramped up; recent disruptions at smelting and processing facilities in key refining hubs have reduced refining availability, lowered delivery promptness, and increased near-term metal premiums.
Asian markets were mostly higher yesterday. Japan’s Nikkei 225 (JP225) rose by .27%, China’s FTSE China A50 (CHA50) gained 0.59%, while the Australian ASX 200 (AU200) finished 0.09% higher. Hong Kong’s Hang Seng (HK50) fell by 0.13%. Weak economic data in New Zealand prompted traders to price in greater policy easing by the Reserve Bank of New Zealand (RBNZ). Markets are now fully pricing in a 25 bp rate cut to 2.75% in October, with a 30% probability of a larger 50 bp cut. The ANZ-Roy Morgan survey, meanwhile, showed that New Zealand consumer confidence improved in September, suggesting that earlier rate cuts are starting to take effect. The New Zealand dollar lost over 1% for the week, marking its second consecutive weekly decline.
The offshore Yuan stabilized at 7.14 per dollar on Friday but still showed a significant weekly drop amid a strengthening US dollar. The dollar continued to gain as traders revised expectations for aggressive Fed rate cuts following a series of better-than-expected economic releases. Adding further pressure on the Yuan was President Donald Trump’s announcement of a new round of punitive tariffs. Effective October 1, a 100% tariff will be placed on branded and proprietary pharmaceutical imports, except for companies that establish manufacturing capacity in the US.
