Potential U.S. shutdown and Gaza peace plan: Market reaction to day key events

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Potential shutdown and Gaza peace plan

Key events of the day

US peace plan for Gaza. The White House unveiled a detailed initiative for an immediate ceasefire, the release of hostages, and the creation of a transitional technocratic government in the Gaza Strip. Mediators from Qatar and Egypt delivered the proposal to a Hamas delegation, while Israeli Prime Minister Benjamin Netanyahu supported the plan, calling it a “decisive step” toward ending the war.

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Threat of a U.S. shutdown. Vice President JD Vance said the US government is heading toward closure due to the Democrats’ position. Donald Trump’s negotiations with leaders of both parties failed to produce a compromise: Democrats are demanding an extension of health-care subsidies and the reversal of Medicaid cuts. If the government shuts down, hundreds of thousands of employees would be furloughed without pay, and the release of key economic data would be suspended.

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YouTube compensation to Trump. The video platform agreed to pay $24.5 million to Donald Trump and other plaintiffs whose accounts were blocked after the January 6, 2021 events. Of this amount, $22 million will go directly to Trump, with the remainder going to Naomi Wolf and conservative organizations. Previously, both Meta and X reached similar agreements with Trump.

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Decline in Russia’s oil and gas revenues. Moscow expects oil and gas revenues in 2025 to fall to $100 billion — the lowest since the pandemic year of 2020. That’s 22% less than the previous year’s level. At the same time, the Kremlin plans to increase military spending and raise taxes to finance the budget deficit.

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Market reaction

Currencies. The US dollar remained under pressure on Tuesday as investors priced in the risk of a government shutdown and a potential delay in the release of labor market data.

Europe. European stock markets opened mixed: the FTSE and CAC 40 slipped, while Germany’s DAX gained 0.4% and Italy’s FTSE MIB rose 0.13%. Investors are closely watching Trump’s new tariffs on imported timber and furniture, as well as the looming US shutdown, which could affect the country’s credit rating.

Gold and Metals. Gold climbed to $3,867 per ounce, setting a new all-time high. The rally has been fueled by strong central-bank demand and expectations of renewed Fed rate cuts. Gold is up 47% year-to-date, on track for its best performance since 1979. Silver and platinum, after sharp gains, paused but remain at multi-year highs.

Oil. Brent crude fell to $67.7 per barrel amid expectations of another OPEC+ production hike and the resumption of oil exports from Iraq’s Kurdistan region via Turkey. Analysts warn of a looming supply glut.

Cryptocurrencies. Bitcoin surged 4.5% in two days, testing the $114,000 level. The rebound followed a correction to $109,500, which analysts attribute to the clearing of overleveraged long positions. The market is now recovering in anticipation of Uptober, as this month has traditionally brought gains for cryptocurrencies.

As a reminder, on September 28, the global agenda focused on sanctions, trade initiatives, and regional elections. The UN reinstated restrictions against Iran, the US administration considered new tariffs on electronics, Moldova’s pro-European party won a parliamentary majority, while Singapore and the UAE ranked as world leaders in cryptocurrency adoption.

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