The stock market stumbled into September with investors on edge. U.S. equity futures moved sideways after the Labor Day break, reflecting caution over fresh legal and political shocks. A federal appeals court struck down much of President Trump’s global tariffs, ruling they were unconstitutional. Trump vowed to challenge the decision at the Supreme Court, but the uncertainty has already rattled Wall Street. Historically, September is the weakest month for stocks, with the S&P 500 losing an average of more than 4% in recent years. This seasonal weakness, combined with political turbulence, is making traders reluctant to place bold bets.
European markets mirrored the cautious tone, with Germany’s DAX and France’s CAC 40 trading slightly lower. In Asia, sentiment was mixed, as investors digested the tariff ruling and the Shanghai Cooperation Organization summit. The Nikkei and Kospi posted modest gains, but China’s CSI 300 sank. Across all regions, the stock market remains hostage to political headlines, setting up a fragile environment for the weeks ahead.
Gold Surges to Record Highs on Fed Cut Bets
Gold broke through $3,500 an ounce, setting a new record and cementing its role as one of the year’s standout assets. The rally reflects rising bets that the Federal Reserve will cut rates this month. Softer economic data and a cooling labor market are fueling expectations of policy easing. For investors, gold’s appeal lies in its stability at a time when stocks look volatile and bond markets suffer. UBS analysts expect bullion to keep setting new highs, driven by persistent geopolitical risks and doubts over the Fed’s independence.
Safe-haven demand is not just about U.S. politics. Rising tensions in global trade, persistent inflation fears, and political divisions in Europe are all pushing investors toward gold. Silver has also gained strongly, doubling in three years alongside gold. Both metals now serve as shields for portfolios under pressure from unpredictable policy moves. For traders, the message is clear: gold is once again the asset of choice when the stock market looks shaky.
Oil Holds Steady as OPEC+ Eyes Output Decisions
Oil prices edged higher, though gains remain capped by concerns of oversupply. Brent crude hovered near $69 a barrel, while West Texas Intermediate traded around $65. Traders are waiting for this weekend’s OPEC+ meeting, where the group will decide on output levels for October. Most expect supply to remain steady, but the outcome could shift market balance if production cuts return to the table.
Russian oil flows are another flashpoint. Washington is pressuring India to scale back purchases, but New Delhi has resisted, signaling closer ties with Moscow. Meanwhile, Ukrainian strikes on Russian energy facilities are limiting downside risk for oil, providing a floor for prices. Still, analysts warn that expectations of a surplus are keeping a lid on gains. Oil has already dropped 8% this year, highlighting how fragile demand remains in a slowing global economy.
Global Stock Market Strains Under Tariff and Political Risks
The stock market’s fragile footing is not just a U.S. issue. Europe is bracing for key inflation data this week, while Japan faces sticky price pressures that could test the Bank of Japan’s resolve. Political turmoil in France has pushed bond yields higher, adding another layer of stress to European markets. In Asia, regulators continue to crack down on trading irregularities, with Australia’s watchdog recently fining Societe Generale over suspicious futures orders. These events highlight how fragile sentiment is, as traders balance domestic risks with global uncertainties.
Meanwhile, Trump’s repeated clashes with the Federal Reserve remain a central worry. A court ruling is still pending on whether he can fire a sitting Fed governor. That case has become symbolic of fears that U.S. central bank independence could erode. If confidence in the Fed weakens further, both the stock market and the dollar could face turbulence. Investors are watching closely, aware that trust in institutions is as important as economic data.
Bonds and Commodities Point to Rising Volatility
September is not just about the stock market. Long-dated bonds also face a historically weak month, often suffering losses as governments ramp up issuance after the summer lull. This year, political instability in France and Japan’s shifting policy outlook are amplifying risks. Investors are cautious ahead of U.S. payrolls data and eurozone inflation numbers, both of which could shape central bank decisions.
Against this backdrop, gold looks set to remain strong, while oil trades in a tight range until OPEC+ decides its next move. Stocks, however, face the hardest test. With tariffs in question, political risks high, and September’s poor track record, the coming weeks may prove difficult. Investors are diversifying into gold and cash, preparing for more volatility. Whether the stock market can hold its summer gains may depend less on earnings and more on politics and policy.