SoftBank's Nvidia Stake Sale Hits Tech; Focus Shifts to House Vote and FOMC Speeches

The euro strengthened against the U.S. dollar on Tuesday rising almost 0.30% after rebounding from earlier low. The move came as soft U.S. economic data pressured the greenback, reinforcing expectations of a potential Federal Reserve rate cut in December.

The latest ADP Employment Report indicated further signs of labor market cooling, while the NFIB Small Business Optimism Index fell to its lowest level of the year. The disappointing figures added to concerns about the U.S. economic outlook and supported bets that the Fed may ease policy sooner rather than later.

In Washington, the U.S. Senate passed a stopgap funding bill late Monday with a 60–40 vote. The measure now moves to the House of Representatives, where Speaker Mike Johnson has expressed confidence it will pass quickly, averting a potential government shutdown.

Federal Reserve officials offered differing perspectives on the policy outlook earlier in the week. Fed Governor Stephen Moran maintained a dovish stance, suggesting the possibility of a 50-basis-point rate cut in December. In contrast, St. Louis Fed President Alberto Musalem noted that inflation remains closer to 3% than 2% and that monetary policy is approaching neutral territory rather than being overly restrictive.

In Europe, the German ZEW Economic Sentiment Index for November showed that investor pessimism persists despite a modest improvement in current conditions. Across the eurozone, sentiment improved slightly, surpassing expectations and providing modest support for the single currency.

Looking ahead, monetary policy divergence remains a key driver for EUR/USD. The European Central Bank (ECB) is expected to keep rates steady through 2027, while markets anticipate the Federal Reserve will deliver roughly 125 basis points of rate cuts by late 2026.

Gold prices climbed to a near three-week high on Tuesday, supported by growing expectations that progress toward ending the U.S. government shutdown — and the resumption of key economic data releases — could pave the way for a Federal Reserve rate cut as early as next month.

Gold, often viewed as a safe-haven asset, typically benefits in lower interest rate environments as it offers no yield.

The U.S. Senate on Monday passed a bipartisan agreement to end the record-long government shutdown, which had stalled the release of key economic indicators on employment and inflation. The return of such data is expected to give policymakers more clarity ahead of the Fed’s next policy decision.

While the Federal Reserve cut rates at its most recent meeting, Chair Jerome Powell emphasized that another move this year is “not guaranteed.”

Recent U.S. data has underscored a softening economy: October employment figures showed job losses, and early November consumer sentiment fell to its lowest level in more than three years. Fed Governor Stephen Miran added to the dovish tone Monday, suggesting that a 50 basis-point cut could be warranted next month amid cooling labor conditions and easing inflation.

Oil prices climbed about $1 on Tuesday, supported by the latest U.S. sanctions targeting Russian energy exports and optimism that the U.S. government shutdown may soon end. However, persistent concerns over a potential crude glut limited further gains.

Traders continued to evaluate the impact of new U.S. sanctions on Russian oil and refined products. The measures have disrupted exports and created ripple effects across global energy markets.

In the latest development, Russia’s Lukoil declared force majeure at one of its Iraqi oilfields, sources told Reuters — the most significant consequence yet of the sanctions imposed last month.

Meanwhile, Saudi Arabia, Iraq, and Kuwait are set to increase crude exports to India in December, according to sources at four Indian refiners. The move comes as Indian buyers seek alternatives to Russian barrels amid tightening Western sanctions.

Market sentiment was also buoyed by hopes that the longest U.S. government shutdown in history could end this week. The Senate has approved a bipartisan funding measure, and the House of Representatives is expected to vote on the deal Wednesday.

Despite supportive headlines, oil’s gains were capped by ongoing worries about oversupply. Earlier this month, OPEC+ agreed to raise December output targets by 137,000 barrels per day, though the group also signaled a pause in production increases during the first quarter of next year.

U.S. stocks closed mixed on Tuesday, with the US 500 reversing early losses to end modestly higher as investors welcomed signs of progress toward ending the prolonged U.S. government shutdown. Gains were capped, however, by weakness in major artificial intelligence (AI) stocks including Nvidia.

AI-related stocks were under pressure after SoftBank Group announced it had sold its entire $5.83 billion stake in Nvidia as it shifts focus toward new investments in OpenAI, the maker of ChatGPT.

Shares of CoreWeave, an Nvidia-backed cloud computing firm, also declined after the company said a third-party data center partner had delayed a key project. The update overshadowed otherwise strong third-quarter results, as the company continues to expand partnerships with major tech players including OpenAI and Meta Platforms.

Investor sentiment was lifted by progress in Washington as the U.S. Senate passed a bipartisan spending package aimed at ending the longest government shutdown in U.S. history. The bill now moves to the House of Representatives, where it is expected to pass with Republican support before being signed into law by President Donald Trump.

The shutdown has disrupted federal operations and likely weighed on fourth-quarter economic growth, but expectations of a resolution have underpinned recent gains on Wall Street.