Investors eye US Employment data amid geopolitical risks and AI concerns

ISTANBUL

Investors are closely watching the US employment data to be released as geopolitical risks are on the rise worldwide, and the Fed’s monetary policy decisions continue to influence investors.

A combination of many risk factors has shaken the predictability of the market. Concerns over a possible military escalation between the US and Iran are still on the table.

The US reportedly shut down an Iranian drone, while Iran allegedly intercepted a US flagged tanker in the Strait of Hormuz.

Additionally, the four-day partial federal government shutdown in the US ended recently with the federal government returning to full operation after the House of Representatives approved a budget package signed by US President Donald Trump.

Tuesday’s non-farm payrolls data was delayed due to the partial shutdown, shifting investor attention to the ADP private sector employment data to be released on Wednesday.

The private sector employment data is expected to guide the Fed’s next policy decisions, while money markets estimate that the bank will not cut rates until June.

Richmond Fed President Tom Barkin said last year’s rate cuts supported the labor market and added that the Fed’s next goal should be to bring inflation back to its target level.

Trump’s pick for Fed Chair, Kevin Warsh, does not view interest rates as the sole policy tool. Having served on the Fed Board of Governors from 2006 to 2011, he was also involved in negotiations during the 2008 financial crisis.

The Treasury Department is expected to announce its three-month borrowing program on Wednesday.

Following these developments, the US 10-year bond yield stood at 4.27%, with sharp declines in precious metals giving way to a recovery as gold and silver rose. Gold traded above $5,000 per ounce again on Wednesday.

Gold is currently trading at $5,074 per ounce, up 2.6%, and silver is at $87.8 per ounce with an increase of 3.4%.

The US Dollar Index closed Tuesday down 0.2% at 97.4 and on Wednesday it is down 0.1% to 97.3.

Analysts say the limited decline in the index and geopolitical concerns led to some recovery in precious metals.

Brent crude oil declined 0.5% to $67.7 per barrel at the same time.

The New York Stock Exchange saw a negative trend amid risks related to artificial intelligence (AI).

Some companies may be affected after Anthropic, the developer of the Claude chatbot, announced a new AI tool that can perform tasks in law, financial analysis, and sales.

Analysts say the development could impact the profitability outlook of some software and tech companies.

Investors were quick to move, as the shares of Salesforce declined 6.8%, Adobe 7.3%, Synopsys 8.5%, and Intuit 10.9%.

At the same time, Nvidia shares lost 2.8%, Broadcom 3.3%, and Micron Technologies 4.2%.