Typhoon threatens Hong Kong

David Morrison

SENIOR MARKET ANALYST

23 Sep 2025

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Asian Pacific stock indices were once again mixed overnight, despite fresh record closes across Wall Street on Monday. Hong Kong’s Hang Seng slipped 0.7% as the city braced for Super Typhoon Ragasa, which is expected to make its closest approach to the Pearl River Estuary by tomorrow morning.

The Shanghai Composite was modestly lower, ending the session down 0.2% while Taiwan’s Taiex surged 1.4% to hit a fresh record high. The index was boosted by strength across technology names, helped along by news of a partnership between US AI pioneers, Nvidia and OpenAI. Australia’s ASX 200 rose 0.4% and Japan’s markets were closed for a public holiday.

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Wall Street extends record run

US stock indices were once again firmer across the board on Monday, with technology stocks leading the charge. The Nasdaq gained 0.7%, fuelled by a nearly 4% jump in Nvidia after the company announced plans to invest $100 billion in OpenAI to support the buildout of data centres.

Source: TN Trader

The S&P 500 and Dow also finished at fresh all-time highs, adding 0.4% and 0.1% respectively, while the small-cap, domestically focused Russell 2000 rose 0.6%, trading within easy reach of last week’s record levels.

This means that the giant corporations which make up the ‘Magnificent Seven’ remain in demand while investors broaden out their exposure into the smaller, overlooked value stocks which make up the Russell – an unusual situation, which suggests that risk appetite and confidence in US equities remain at high levels.

Despite this, US stock index futures were a touch softer in early trade this morning, although they found a modest bid as the European session progressed.

Nvidia’s rally yesterday helped to lift the broader tech sector. Yet concerns remain over whether the ongoing AI-driven rally can continue powering US equities. The leading tech companies are investing hundreds of billions in generative AI, and some investors continue to question if this is money well spent.

Despite this, equities continue to grind higher with little indication that there’s anything on the horizon which could derail the current rally. Investors are looking ahead to Friday’s release of the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation gauge, which could offer clarity on the path of monetary policy.

Yet comments made after last week’s Federal Reserve monetary policy meeting suggest that the central bank is more concerned about potential weakness in the labour market, rather than inflation, which continues to remain stubbornly high.

At the same time, there is a degree of uncertainty politically, as Congress is still unable to secure an agreement to fund the government. If an agreement can’t be reached, then the result will be a government shutdown.

Historically, shutdowns have had a limited impact on markets. But this time could be different, so investors are hoping for a resolution before the month-end. Federal Reserve Chair Jerome Powell is scheduled to speak today. This follows on from the new Fed governor, and Trump appointee, Stephen Miran, who yesterday called for deeper rate cuts.

In other political news, or rather the lack of it, President Trump has still not commented on last week’s Fed rate cut (other than a single nonsensical post on social media).

Nvidia’s investment in OpenAI also spurred rallies in energy names tied to electricity demand. Constellation Energy jumped 4.9%, Vistra Energy rose 3.1%, Oklo advanced 3.8% and Talen Energy climbed 1.5%, with several reaching intraday highs. However, most pulled back after hours.

European stock indices edge higher

European stock indices were firmer across the board this morning, supported by strength across Wall Street last night. Once again, sentiment got a boost from Nvidia’s $100 billion investment in OpenAI as its CEO described the partnership as a “giant project.”

The gains came despite the release of a clutch of disappointing Manufacturing and Services PMIs. Manufacturing was particularly poor, with PMIs for France, Germany, the Eurozone and the UK all coming in below expectations, and with most registering contraction. The Services side of both the Eurozone economies and the UK has fared better. Germany was the standout here, while the UK continues to expand, but at a sharply slower pace than earlier this year.

Source: TN Trader

FX subdued

There was very little movement across currency markets this morning, suggesting investor uncertainty, particularly in relation to where the US dollar may go next. The Dollar Index traded either side of 97.00, having fallen to a three-and-a-half-year low last Wednesday. Traders appear reluctant to take on new positions ahead of Fed Chair Jerome Powell’s speech later today and the latest set of PMI releases.

The EUR/USD continues to trade near multi-year highs, while sterling struggles to find direction. The USD/JPY remained largely range-bound, underscoring the generally cautious tone across FX markets.

However, it is the US dollar which is of primary importance. It has taken a battering so far this year, with the prospect of lower US interest rates, along with the Trump administration's desire to see a weaker dollar, playing off against relatively large, short positioning.

Gold extends record-breaking rally

Gold extended its record-setting rally. Having surged above $3,700 in European trade yesterday, it built on those gains in overnight trade on Tuesday. Gold came within $10 of $3,800 as buyers flooded in on expectations that it can continue to climb further from current levels. Gold has broken above successive resistance levels, supported by widespread demand.

Each fresh push higher has squeezed out short positions, forcing more covering and amplifying the momentum. While the pace of the advance may appear stretched, sentiment continues to favour the bulls, with gold maintaining its role as a preferred safe-haven asset.

The daily MACD continues to push up further into the overbought region. But so far, selling pressure hasn’t been strong enough to trigger a significant pullback.

Source: TN Trader

Just under a week ago, as the US Federal Reserve announced its first rate cut in nine months, silver fell sharply. It dropped towards $41 per ounce before buyers rushed in and triggered a strong rally. This has, after a minor pullback, continued this morning in a move which took silver above $44 an ounce.

The pullback suggested some profit-taking after the strong advance that carried the metal to multi-year highs. Yet that profit-taking was met with strong demand, suggesting that silver may have further upside. Certainly, the bulls have their sights on the all-time high from April 2011, just below $50. However, as with gold, silver’s daily MACD is looking overbought. This could be the precursor to a significant downside correction. But it’s also possible that silver continues to rally as investors fight with their FOMO.

Source: TN Trader

It's worth bearing in mind that precious metals are back in favour as both stores of value and as viable instruments for speculation, even as cryptocurrencies struggle to find a bid and challenge their own recent highs.

Oil under pressure

Crude oil was a touch firmer overnight. The four-hour chart shows clearly the recent downside pressure on crude. Yet a look at the daily chart suggests that oil continues to trade in a relatively narrow range. As far as front-month WTI is concerned, the first significant area of support comes in around $61.50 per barrel. This has held since June this year.

Source: TN Trader

Yesterday, sellers managed to take WTI back down towards this region, suggesting that a more serious retest may not be far away. Fundamentally, it looks as if additional supply is on the way following an agreement between Iraq and the Kurdish regional government to reopen an existing oil pipeline for the first time in two-and-a-half years. But this news wasn’t enough to trigger further selling.

Looking at supply and demand more generally, analysts say that it is becoming increasingly difficult to find accurate data on which to base their calculations. But analysis of shipping suggests that the world continues to be well supplied by energy products, and crude must compete with Liquid Natural Gas and renewables. Meanwhile, demand growth continues to slide, suggesting that crude prices could remain relatively cheap for some time to come.

Natural Gas range-bound near recent lows

Natural gas prices remain subdued, with the cash price retesting sell-off lows from ten days ago around $3.060. If prices can hold around here as support, then the chart suggests that gas could start to rally again. But traders may be wary of taking on too much exposure, given that prices lost 35% in the two months between late June and late August.

The current price action highlights the ongoing stalemate between bulls and bears, with neither side able to seize clear control. Until one side forces a breakout, the market is likely to continue oscillating around current levels.

Crypto modestly firmer

Cryptocurrencies steadied overnight, posting a modest bid after coming under heavy selling pressure in the prior session. Bitcoin and Ether continue to trade within well-defined ranges, although the latter is near the bottom of its own range with prices coming close to retesting the key $4,000 level.

Bitcoin is faring a touch better than Ether. But its daily MACD has turned down, suggesting that a retest of $110,000 can’t be ruled out. The muted tone suggests traders are waiting for stronger catalysts to dictate the next move. While the short-term bounce provides some relief, the overall picture remains one of hesitation and consolidation within the crypto space.

VIX flat

The VIX continues to flatline, signalling that volatility expectations remain contained despite record highs in equities and lingering macro risks. The index has struggled to push decisively higher, reflecting a market still dominated by confidence in the prevailing uptrend. 

Yet, with PMI data and Fed Chair Jerome Powell’s remarks later today, there is potential for movement. For now, however, the volatility gauge remains subdued, suggesting that investors are not aggressively seeking protection at current levels.

Market outlook

US markets continue to climb to record levels, driven largely by technology and momentum buying. Gold has joined the rally with repeated record-breaking sessions, keeping pressure on shorts.

Yet, the sustainability of these moves will depend on upcoming data and central bank communication. Powell’s comments this evening and today’s PMI prints could provide the next clear direction, while the looming government shutdown remains a background risk.


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