The trading week of September 27 to October 3, 2025, was marked by robust gains in major equity indices, driven by strong economic data from China and resilient U.S. indicators, despite the U.S. government shutdown that began on October 1—the first in six years—due to Congress’s failure to pass a funding measure. This partial closure disrupted federal services, delayed key reports like September nonfarm payrolls, and amplified political tensions, with markets nonetheless showing resilience. Commodities faced headwinds from energy sector declines, while cryptocurrencies surged, led by a double-digit rally in Bitcoin amid renewed risk appetite. The S&P 500 closed at historic highs for the fifth consecutive month, shrugging off shutdown concerns, with investor sentiment remaining bullish at 42.92% according to AAII, above the historical average of 37.61%. This recap analyzes the week’s key events, integrating a narrative of the economic calendar and market sentiment, and summarizes performance across major world indices, commodities, forex, and cryptocurrencies.
Key Events and Economic Calendar Summary (Sep 27-Oct 3)
The week unfolded against a backdrop of political and economic turbulence, with the U.S. government shutdown starting on October 1, halting operations at agencies like the Social Security Administration and suspending payments, while delaying critical data releases, including nonfarm payrolls, which sparked market caution. Political gridlock intensified, with Republicans blaming Senate Majority Leader Chuck Schumer for obstructing a deal, while President Donald Trump seized the moment to advance his energy agenda, ordering troop deployments and releasing coal reserves, fueling debates over economic and environmental impacts in a pre-election year. Concurrently, fears of a trillion-dollar AI bubble grew, with investors questioning massive investments in firms like OpenAI and Microsoft, drawing parallels to the dot-com crash, as a poll indicated 60% of Americans viewed AI as a threat to jobs, with Trump pushing “America-first AI” against Democratic calls for big tech taxation. Large-cap stocks showed mixed performance: Apple gained 2.5% on record AI-driven iPhone 17 sales, Nvidia fell 1.8% on data center concerns, and Tesla rose 4% on autonomous vehicle progress, highlighted as a top pick for October. Political tensions escalated with Trump attending a charity event post-shutdown, while storms in the Carolinas and a U.S. naval strike on Venezuelan drug boats in the Atlantic underscored climate and security vulnerabilities, amplifying bipartisan criticism in a polarized election cycle. Social media discussions on X highlighted freight shipment collapses signaling recession risks, contrasted by enthusiasm for prediction markets like Polymarket, boosting crypto sentiment.
Amid this, the economic calendar drove market dynamics with key releases. On Tuesday, September 30, China’s NBS Manufacturing PMI rose to 49.8, beating the 49.6 consensus, signaling factory stabilization, though the Non-Manufacturing PMI fell to 50.0, missing the 50.3 forecast, indicating flat services growth. Caixin’s Manufacturing PMI surged to 51.2 (vs. 50.3 expected) and Services PMI to 52.9 (vs. 52.3), fueling optimism for Beijing’s stimulus measures, lifting Asian markets and commodities like copper, despite global AI and shutdown concerns. Australia’s RBA held rates at 3.6% as expected, with its policy statement and press conference emphasizing data-driven caution, supporting the AUD in a high-confidence investor environment tempered by shutdown-related trade risks. Eurozone retail sales grew 1.8% YoY in August, while the UK’s Q2 GDP confirmed 0.3% QoQ and was revised up to 1.4% YoY (beating 1.2% expected), boosting the FTSE 100. Eurozone preliminary CPI rose 0.2% MoM and 2.4% YoY (above 2.3% forecast), with HICP at 2.4% YoY (exceeding 2.2%), prompting ECB President Christine Lagarde to note disinflation progress but caution on persistent services inflation, keeping rate cut expectations alive. On Wednesday, October 1, as the shutdown began, Japan’s Tankan Manufacturing Index hit 14, below the expected 15 but up from 13, strengthening the yen. Eurozone final core HICP held at 0.1% MoM and 2.3% YoY, with headline HICP at 2.2% YoY, supporting ECB easing bets and European bullishness. U.S. ADP employment disappointed at -32K vs. +50K expected, exacerbated by suspended federal data, signaling labor market cooling, but the ISM Manufacturing PMI at 49.1 edged above 49.0, easing contraction fears and allowing the Dow to hit a record despite political turmoil. Thursday, October 2, saw Australia’s trade surplus shrink to 1,825M, well below 6,500M expected, pressuring the AUD amid export weakness and global confidence mixed by U.S. shutdown fallout and regional climate issues, including Carolina storms and Arizona floods. Swiss CPI rose 0.2% YoY, matching prior but missing 0.3%, highlighting SNB-monitored deflation risks alongside European AI regulation debates. Friday, October 3, featured speeches: BoJ Governor Kazuo Ueda addressed yen stability amid shutdown-driven trade tensions, Lagarde discussed Eurozone balance, and BoE’s Andrew Bailey hinted at gradual UK easing. The U.S. ISM Services PMI at 50.0 missed 51.7, signaling a services slowdown, yet markets closed at highs, driven by large caps like Apple and Tesla, despite Palantir’s drag on the Nasdaq. These events underscored China’s recovery and European inflation upside, offsetting U.S. weaknesses, AI concerns, and shutdown effects, with bullish sentiment driven by resilience amid political chaos, though tempered by recession signals in consumer confidence and freight collapses.
Weekly Performance and Last Prices: Major World Indices
Indices rallied broadly, led by U.S. tech optimism and Chinese data, with the Dow Jones gaining 1.1% to 46,758.28, hitting a record despite the shutdown and Palantir’s drag on the Nasdaq. The S&P 500 rose 1.09%, buoyed by large caps like Apple and Nvidia, countering AI bubble fears. Here’s a snapshot (last price as of Oct 3; 1-week % change):
| Index | Last Price | 1-Week Change |
|---|---|---|
| Dow Jones | 46,758.28 | +1.1% |
| S&P 500 | 6,715.79 | +1.09% |
| Nasdaq | 22,780.51 | +1.32% |
| Small Cap 2000 | 2,476.18 | +1.72% |
| S&P/TSX (Canada) | 30,471.68 | +2.39% |
| DAX (Germany) | 24,378.8 | +2.69% |
| FTSE 100 (UK) | 9,491.25 | +2.22% |
| CAC 40 (France) | 8,081.54 | +2.68% |
| FTSE MIB (Italy) | 43,258.11 | +1.43% |
| Nikkei 225 (Japan) | 45,769.5 | +0.91% |
| Hang Seng (HK) | 27,140.92 | +3.88% |
| Shanghai Composite | 3,882.78 | +1.43% |
European indices like DAX and CAC outperformed on inflation beats and Lagarde’s optimism; Asia surged on Chinese PMIs, with Wall Street’s rally defying shutdown and AI concerns, though Palantir’s drop weighed on tech.
Commodities: Weekly Performance and Last Prices
Precious metals rose amid geopolitical and shutdown uncertainty, with gold on a seven-week rally as a safe haven against AI and political risks, but energy plunged on demand fears and oversupply, exacerbated by shutdown logistics disruptions. Gold gained 3.03% to 3,908.9, benefiting from flight from tech bubble risks.
| Commodity | Last Price | 1-Week Change |
|---|---|---|
| Gold | 3,908.9 | +3.03% |
| Silver | 47.965 | +3.23% |
| Copper | 5.109 | +7.65% |
| Platinum | 1,642.1 | +2.71% |
| Crude Oil WTI | 60.88 | -7.36% |
| Brent Oil | 64.53 | -7.99% |
Copper’s surge reflected Chinese stimulus hopes and AI infrastructure demand; oil’s drop tied to oversupply and weak demand, worsened by freight shipment collapses and shutdown-related logistics issues.
Forex: Weekly Performance
Currencies saw modest moves, with the USD weakening due to soft data, the shutdown’s data delays, and political criticism of Trump’s economic tactics. EUR/USD rose 0.35% to 1.1741, lifted by European inflation.
| Pair | Last Price | 1-Week Change |
|---|---|---|
| EUR/USD | 1.1741 | +0.35% |
| GBP/USD | 1.3476 | +0.56% |
| USD/JPY | 147.47 | -1.38% |
| AUD/USD | 0.6599 | +0.89% |
| USD/CAD | 1.3947 | +0.06% |
The yen strengthened on Tankan and shutdown-driven risk aversion; AUD gained post-RBA, reflecting commodity sentiment despite trade weakness. USD/CAD stayed flat but volatile amid North American trade tensions.
Crypto: Weekly Performance
Cryptocurrencies rallied sharply, with BTC up 11.13% to 122,150 on risk-on flows and hype around prediction markets like Polymarket, seen as a hedge against traditional AI bubble risks. ETH rose 11.69%, tied to decentralized AI advancements.
| Asset | Last Price | 1-Week Change |
|---|---|---|
| BTC/USD | 122,150 | +11.13% |
| ETH/USD | 4,484.53 | +11.69% |
| BTC/EUR | 103,940.3 | +10.8% |
Gains aligned with equity rallies and Chinese optimism, though debates on $XRP and $SOL utility vs. hype highlighted crypto’s role as a shutdown hedge.
Outlook: Stimulus, Shutdown, and AI Risks
Heading into October—a historically volatile month—focus shifts to delayed U.S. payrolls and central bank meetings, with the S&P 500 poised for gains if its historic rally holds, but risks loom from an extended shutdown impacting data and confidence. Chinese PMI strength signals growth traction, boosting large caps like Tesla, but U.S. services weakness, consumer confidence below key thresholds, and public fears of AI’s job impact warn of caution; a bursting AI bubble could drag Nvidia and peers. Policy divergence persists, with ECB and BoE eyeing cuts amid inflation upticks, while Trump’s fossil fuel push and Democratic AI tax calls add political volatility. Gold and crypto shine as hedges, but investors must brace for October’s potential storms—literal and figurative.
Disclaimer
MarketsFN.com is not a registered investment advisor and nothing in this article should be considered financial advice. The content is for informational purposes only and reflects the author’s interpretation of publicly available data. Trading in financial instruments and/or cryptocurrencies involves high risks, including the potential loss of some or all of your investment. Prices are volatile and may be affected by external factors such as financial, regulatory, or political events. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
