Last week was yet another week of record index highs. The S&P 500 index hit its 31st record finish, extending a rally that is beginning to worry many investors and traders. Favored techs, the Magnificent 7 and artificial Intelligence stalwarts are adding considerable value to the market, with nearly all sectors participating with many stocks moving higher. The normally quiet smaller value Russell 2000 index has moved significantly higher, tagging along with the popular techs and AI stocks. According to the Wall Street Journal of Friday October 4-5, “Valuations have never been higher, by some measure. The backers pouring billions into the artificial-intelligence build-out are unsure how–or if–they’ll get their investment back.” A couple of ‘budding’ concerns facing investors are the ongoing Federal Government Shutdown and the upcoming Jobs Report, due Friday as both will have heavy influence on investors. Up to now the shutdown hasn’t affected market activity, however as time goes on the effect will be a concern, and we are nearing that point.
All three valuable metals, gold, silver and now platinum are in the sights of those investors looking for safer havens. As gold continues on a ‘tear,’ now trading at $4.025.60, up 52% this year, both silver, up nearly 70% this year to $48.00 a troy ounce and Platinum up 85% from January 1st, presently trading at $1,691 a troy ounce are riding the ‘fast track.’ As many world economies are struggling financially, investors are turning to precious metal investing. After a decade of lying dormant, with mostly flatline trading, 2025 has become a breakout year for platinum giving investors and traders more choices in the ‘safe-haven’ sector. “In September investors channelled over 33 billion into U.S. exchange-traded funds linked to physical gold,” according to Morningstar Direct.
Both the Nasdaq and S&P 500 floated higher on Monday’s open, again to new record levels as more AI mega deals were announced involving billions of dollars. No progress on the Government Shutdown as Democrats and Republicans appear to have “no end game in sight.” According to Jay Hatfield, chief executive and chief investment officer of Infrastructure Capital Associates, “It’s become a bit of a momentum trade. When you come out of a Fed tightening cycle, gold would rally, and we are clearly coming out of it now.” The Dow Jones index stalled , with both the S&P 500 up 0.4% hitting its 32nd record close with the Nasdaq Composite reaching ‘new ground’ again also, its 31st new high in 2025. Bitcoin crested a new high of $126.273 early Monday, leveling just above $125,000. Some investors are beginning to reference Bitcoin as “digital gold,” as funds earmarked are often pivoting out of the stock market as a hedge.
Wednesday was another record setting day for the two ‘hot indexes.” Both the S&P 500 and Nasdaq sizzled, recording their 33rd and 32nd high days of the year respectively. The Dow Jones again struggled all session finishing near flatline off 0.1%. Good news, the dollar strengthened against its usual foe, the Japanese Yen, after a 6 week floundering. Bond markets all edged higher responding to Fed Chair Powell’s just released September 16-17 comments revealing that a few governors supported no cut. The 10-year Treasury yield steadied at 4.2128% according to Tradweb. Markets took a breather Thursday as metals lost a bit, and the indexes were flat, with the Dow Jones off over 243 points. Gold hovered near $3,988.00 a troy ounce, down $79.90 as investors and traders evaluated positions and directions.
RUMBLINGS ON THE STREET
David Soloman, CEO of Goldman Sachs, WSJ – “I wouldn’t be surprised by a stock market ‘drawdown’ in the next year or two given the run we’ve had. I think that there will be a lot of capital that’s deployed that will turn out to not deliver returns, and when that happens, people won’t feel good.” (recorded by Bloomberg)
Nancy Tengler, chief investment officer at Laffer Tengler Investments, WSJ – “I’ve heard every summer since 2022 that the tech trade is over,” She added “It’s normal to see stretched valuations and periods of increased concentration when the economy is transforming.”
Dave Lutz, an equity sales trader and macro strategist at JonesTrading, WSJ – “The Fed is flying a little blind,and maybe they err a little bit on the more cautious side and continue to cut rates the longer this government shutdown goes on.”
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