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European equity markets opened the week on a cautious positive note Monday, as investors positioned ahead of key U.S. labor data and closely monitored political wrangling in Washington over a potential government shutdown.
By 04:00 ET (08:00 GMT), the Stoxx 600 rose 0.3%, while Germany’s DAX and France’s CAC 40 each inched up 0.1%, and the U.K.’s FTSE 100 climbed 0.5%.
Pharma Sector in Focus: GSK Surge and AstraZeneca Plans
Healthcare stocks provided a lift to European markets. GSK shares jumped more than 3% after the British drugmaker announced that CEO Emma Walmsley will step down, to be succeeded in January by Luke Miels.
AstraZeneca also gained after confirming it will keep its London listing and headquarters but list shares directly on the New York Stock Exchange instead of via depositary receipts, in a move expected to improve investor access.
Technology, industrial goods, and services also outperformed in early trade.
Fed Outlook and Nonfarm Payrolls Awaited
Markets were already turning their attention to Friday’s U.S. nonfarm payrolls report, seen as a crucial test for the Federal Reserve’s policy path. Economists expect the U.S. added 51,000 jobs in September, compared to 22,000 in August, with unemployment steady at 4.3%.
Supporting the labor market remains central to Fed decision-making. Earlier this month, the central bank cut rates by 25 basis points, prioritizing signs of employment weakness despite still-elevated inflation. Updated Fed projections indicated more cuts are likely before year-end, though the pace will depend on data.
U.S. Government Shutdown Risks Loom
Markets also kept a wary eye on Washington, where lawmakers face a September 30 deadline to avoid a partial government shutdown. Without a stopgap funding bill, this would mark the 15th shutdown since 1981.
- Republicans have proposed a temporary extension through November.
- Democrats insist on reversing healthcare and Medicaid cuts before approving new funding.
- President Donald Trump is set to meet party leaders Monday for mediation talks.
A shutdown could disrupt economic activity and delay release of September payrolls data, amplifying uncertainty for markets.
Gold Hits Record as Haven Demand Surges
Gold prices surged to new highs as safe-haven flows intensified on shutdown fears. Spot gold jumped 1.5% to $3,814.91/oz, while futures rose 0.9% to $3,844.50/oz, building on a record-breaking rally.
Precious metals remain supported by expectations that the Fed will continue to lower interest rates, with bullion historically benefiting from both lower yields and times of political/geopolitical stress.
Oil Slips on Iraq Supply and OPEC+ Plans
In contrast, oil prices pulled back after last week’s gains. Brent crude futures dropped 1.1% to $68.46, and WTI crude futures fell 1.3% to $64.87 by 04:08 ET.
The retreat came as Iraq resumed crude exports from its Kurdistan region through Turkey after a 2½-year halt. Additionally, OPEC+ producers signaled plans for another output hike in November, adding to supply-side pressures.
