TRADER’S EDGE (1 October 2025) - U.S. Stocks Hit Fresh Highs on Fed Cut Optimism and AI Strength ;FBM KLCI Rises for Third Session, but Gains Capped by External Risks

$Dow Jones Industrial Average (.DJI.US)$ +0.18%
$S&P 500 Index (.SPX.US)$ +0.41%
$Nasdaq Composite Index (.IXIC.US)$ +0.30%

U.S. stocks advanced to fresh highs on Tuesday, with major indices supported by optimism over potential Fed rate cuts and ongoing enthusiasm around artificial intelligence. Markets remain resilient and on track for a strong monthly performance despite rising political and economic uncertainties.

Attention is shifting to the risk of a government shutdown, which could delay key labor market data and weigh on near-term sentiment. At the same time, new tariffs on lumber, furniture, and kitchen fittings have revived trade concerns, while Pfizer is expected to secure a reprieve from pharma tariffs in exchange for lowering Medicaid drug prices, underscoring policy as a key driver for markets.

$U.S. 10-Year Treasury Notes Yield (US10Y.BD)$ @ 4.15%

Treasury yields fell in Q3 as cooling jobs, sticky inflation, and Fed caution signal a slowing economy.

$CoreWeave (CRWV.US)$ shares jumped 12% after disclosing a multibillion-dollar cloud capacity deal with Meta worth up to $14.2 billion through 2031, adding to a string of major AI infrastructure contracts with Nvidia, OpenAI, and Microsoft. Since its IPO in March, the stock has more than tripled amid surging demand for AI computing, though volatility persists with mixed analyst targets and insider selling offset by institutional buying.

Malaysia Market

Local Macro:

$USD/MYR (USDMYR.FX)$ @ 4.2085 (-65 pips)

MGS-10 year @ 3.48% (0.00%)

KLCI Performance:

$FTSE Bursa Malaysia KLCI Index (.KLSE.MY)$ @ 1,611.88 (+0.93 points)

Foreign Equity Flow (MYR mil):

USDMYR fell -65 pips as MYR ends higher against greenback on escalating U.S. govt shutdown risks.

Sectoral Performance (%):

KLCI ended firmer with sectoral moves mixed. Utilities (+1.96%) and Construction (+0.29%) led gains, offsetting weakness in REIT (-0.70%) and Healthcare (-0.21%). Overall sentiment stayed resilient, lifting the index by 0.93 points despite uneven performance.

Trade in Focus

$MITRA (9571.MY)$ surged to a seven-year high of 38.5 sen as contract value nearly doubled to RM801.8m. With robust earnings growth and data centre exposure, the stock eyes stronger momentum, though below its all-time high.

Bloomberg source: target price by analysts:

Futures Market

Gold

Gold futures reached a record high in the third quarter, marking their strongest rally on record as investors sought safety amid falling rates, U.S. political uncertainty, and heightened geopolitical risks. The surge was further supported by concerns over Fed independence, the potential government shutdown, and central banks diversifying away from dollar assets.

Crude Oil

Oil prices fell for a second day as expectations of a larger OPEC+ output hike and the resumption of Kurdish exports pressured the market, outweighing supply risks from Ukraine-Russia tensions; sentiment was further weighed by rising U.S. production, weak demand concerns tied to a possible government shutdown, and mixed inventory data showing falling crude stocks but higher gasoline and distillates.

Cryptocurrency

Bitcoin extended gains on renewed optimism from “Uptober” seasonality and fresh whale accumulation after recent selling pressure, though sentiment remains cautious as U.S. political uncertainty and the risk of a government shutdown cloud the outlook.

TLDR:

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