Global Stocks Retreat as Rally From Record Highs Loses Steam
U.S. futures edge lower after the S&P 500 and Dow Jones hit fresh peaks, while commodities like oil and gold see steeper declines on shifting sentiment.
U.S. stock futures signaled a pause in Wall Street’s record-setting ascent on Tuesday, joining a global equity retreat as investors took profits and reassessed a market that had recently pushed to unprecedented highs.
Futures contracts for the S&P 500 edged down by 0.1% in early morning trading, a day after the benchmark index closed above 6,800 for the first time. Contracts on the Dow Jones Industrial Average were similarly muted after the index also secured a record close on Monday. The slight pullback suggests that the powerful momentum that has propelled markets may be easing as investors await fresh catalysts.
The cautious tone was more pronounced across international markets. Europe’s continent-wide Stoxx 600 index fell 0.3% in morning trading, pulling back from its own historical peaks. In Asia, Japan’s Nikkei 225 closed down 0.58%, while Hong Kong’s Hang Seng Index also finished in negative territory, reversing earlier gains.
"After such a strong run, it’s natural to see some consolidation," said a market strategist in London. "Investors are moving to the sidelines to digest the recent gains and are looking ahead to the next set of macroeconomic data for direction."
Nowhere was the shift in sentiment more apparent than in commodity markets. Gold prices experienced a significant downturn, with spot prices falling more than 2% to trade below the key $4,000 per ounce threshold for the first time in weeks. The precious metal, often seen as a safe-haven asset, has fallen nearly 9% from its recent peak as optimism over a potential U.S.-China trade deal reduces demand for portfolio insurance. Analysts also pointed to significant profit-taking after the metal's recent climb.
Oil prices also extended their slide, with West Texas Intermediate crude futures dropping over 1% to trade below $61 a barrel, marking a third consecutive session of losses. The decline has been linked to persistent concerns about a potential supply glut and market chatter about future OPEC+ production policy.
The broad-based pullback comes after a period of robust performance for equities, which were fueled by a combination of resilient corporate earnings, persistent optimism around artificial intelligence technology, and growing expectations for a Federal Reserve interest rate cut. The S&P 500, for instance, rose 1.2% in Monday’s session alone, reflecting broad investor confidence.
Investors are now looking ahead to the Federal Reserve’s upcoming policy meeting for further clues on the path of monetary policy, as well as any new developments in ongoing U.S.-China trade negotiations. These events are expected to heavily influence market direction as the fourth quarter unfolds.