The ISM Services New Orders Index in the United States dropped to 50.4 in September, down from 56. This drop indicates a slower growth rate in new orders for the services sector. In financial news, the Dow Jones Industrial Average increased by 250 points, buoyed by hopes for future rate cuts. Gold prices are also rising, nearing record highs at $3,890, driven by demand as a safe haven amid U.S. economic uncertainty.

Currency Market Activity

In the currency market, EUR/USD rose to around 1.1750, despite challenges from the U.S. Dollar. GBP/USD also gained, approaching the 1.3480 mark, as traders consider the potential effects of a lengthy U.S. government shutdown. In cryptocurrency, Bitcoin is close to $120,000 after reaching a seven-week high, while other altcoins remain strong. This suggests steady demand from both institutions and individual traders. FXStreet has introduced a new design to improve services for traders, addressing challenges in editorial and business strategies. Meanwhile, Pump.fun, a token on Solana’s meme coin platform, is trading positively above the $0.0070 level. The ISM Services New Orders Index’s decline to 50.4 is a serious warning for the U.S. economy. This is the weakest reading in over a year, bringing economic growth dangerously close to a halt. We should prepare for increased market volatility as this potential slowdown becomes clearer.

Fed’s Dilemma Amid Stubborn Inflation

This poor data complicates the Federal Reserve’s situation, as some officials are now talking about more rate cuts. However, the latest Consumer Price Index (CPI) data from August 2025 still shows high inflation at 3.7%. This raises concerns among some Fed members that cutting rates could reignite inflation. The differing views within the Fed make their future policy uncertain. Additionally, the ongoing government shutdown is hurting the U.S. Dollar and increasing demand for safe assets. We recall the 35-day shutdown from 2018-2019, which cost the economy an estimated $11 billion, potentially harming consumer and business confidence again. Due to the dollar’s ongoing weakness, we might consider using options to trade on expected strength in the Euro and the Pound. Buying EUR/USD call options with a strike price around 1.1800 could allow us to profit from further rallies while managing risk. This strategy can benefit from Fed uncertainty and the shutdown’s effects. For equity indices, the market believes that bad economic news may push the Fed to cut rates, which explains the Dow’s rise. We could sell out-of-the-money put options on the S&P 500 to earn premiums, betting that hopes for rate cuts will support the market. This reflects the idea that central bank support could cushion any significant downturn in the coming weeks. Gold is clearly serving as the main safe haven amid ongoing political uncertainty, and we can expect this trend to continue as long as the shutdown persists. Buying call options on gold futures (GC) or a gold ETF is a direct way to benefit from its upward momentum. The resistance level near $3,890 is important to watch for potential profit-taking. Create your live VT Markets account and start trading now.

here to set up a live account on VT Markets now