U.S. stocks moved higher on Wednesday as traders watched a historic rally in gold prices and waited for the release of minutes from the Federal Reserve’s latest meeting, which could offer clues about the direction of interest rates.
By late morning, the S&P 500 was up 0.4%, the Nasdaq Composite gained 0.7%, and the Dow Jones Industrial Average rose 0.2%. Investors are navigating a complicated environment marked by a prolonged U.S. government shutdown that has delayed several key economic reports. In the absence of official data, markets have turned to alternative indicators, including a recent New York Fed survey showing weaker business expectations and higher inflation forecasts, which weighed on sentiment earlier this week.
Global uncertainty also played a role in market moves. New Zealand’s central bank took a dovish stance, while Thailand’s decision was more hawkish than expected. In Europe, political tensions in France eased slightly as fears of a snap election faded, helping French stocks rise. However, industrial production in Germany fell short of forecasts, signaling ongoing weakness in Europe’s largest economy.
Meanwhile, gold prices soared past $4,000 an ounce for the first time ever. The precious metal has jumped more than 50% this year, heading for its best annual performance since 1979. The rally has been driven by growing demand from central banks and investors seeking safety amid political and economic uncertainty. Analysts say the combination of the U.S. government shutdown, expectations of Federal Reserve rate cuts, and concerns about America’s fiscal position have all boosted gold’s appeal.
Even traditional safe havens like the Japanese yen and U.S. bonds have lost some strength, leaving gold as the preferred hedge. The People’s Bank of China has continued buying gold for 11 straight months, despite record prices, while many gold-focused exchange-traded funds have been increasing their holdings.
All eyes are now on the Fed’s September meeting minutes, due later in the day. Policymakers cut rates by 0.25 percentage points at that meeting, restarting an easing cycle paused since December. Officials signaled that more rate cuts could come later this year, as the central bank looks to support a cooling labor market while keeping inflation in check.
A few Fed officials are also expected to speak this week, but analysts believe their comments won’t shift market expectations much without fresh economic data.
In corporate news, Nvidia shares rose after reports that Elon Musk’s AI startup xAI is increasing its funding round to $20 billion, with Nvidia playing a key role in the deal. On the other hand, technology hardware company Penguin Solutions saw its stock drop sharply after missing sales estimates in its fourth-quarter results.
