United States Enters First Government Shutdown Since 2019 Amid Political Disputes

The United States has entered a new government shutdown, its first since 2019, after Congress failed to reach an agreement on passing a funding bill. This development reflects the depth of political division in Washington and raises concerns about its economic and administrative consequences.

 

Implications of the U.S. Government Shutdown on the Economy and Policy

This shutdown follows weeks of tough negotiations between Republicans and Democrats, which ended without a compromise to keep federal institutions funded, underscoring the extent of political polarization in Washington.

• Federal employees: Hundreds of thousands will be directly affected. Large numbers will be furloughed without pay until further notice, while others in essential sectors such as national security and healthcare will continue working—but without compensation.
• Short-term economic impact: Analysts expect limited immediate effects on the broader economy; however, operational consequences are expected to be significant, particularly due to disruptions to public services and delays in numerous government transactions.
• Economic data releases: One of the immediate outcomes is the suspension of key financial reports, including the closely watched Nonfarm Payrolls report due Friday, which is a critical gauge of labor market strength and guides the Federal Reserve’s monetary policy.

Economists warn that a prolonged shutdown could intensify uncertainty in financial markets, particularly amid ongoing debates over the future of interest rates and U.S. fiscal policy. The absence of fresh economic data would also weaken the Fed’s ability to make well-informed decisions in the coming period.

 

A Shadow Over Politics and the Global Economy

The return of a government shutdown once again casts a shadow over the political and economic scene in the United States at a critical juncture for the global economy. Rising partisan disputes and mutual blame over responsibility for the deadlock further highlight the fragility of political consensus in Washington.

The 2025 shutdown underscores not only the vulnerability of U.S. governance to partisan conflict but also the risks it poses—from halted public services to disrupted economic decision-making. If it drags on, its repercussions could weigh more heavily on market confidence and the global economy.

Global markets this week have seen a series of notable economic and financial developments: Eurozone inflation data showed prices stabilizing near the European Central Bank’s target, Nvidia’s stock continued to hit record highs fueled by AI-driven investments, and U.S. data revealed a historic jump in oil production to unprecedented levels. Together, these indicators highlight the global economic landscape and its potential influence on monetary policy, financial markets, and energy.

 

Eurozone Inflation at 2.2% in September, Matching Expectations

Data from Eurostat, released on Wednesday, showed that the preliminary annual consumer price index (CPI) in the Eurozone stood at 2.2% in September, in line with market forecasts, compared to 2.0% in August.

At the same time, the preliminary core CPI—which excludes food, energy, alcohol, and tobacco—remained at 2.3% year-on-year in September, also matching both expectations and the August reading.

These figures confirm that inflation continues to ease at levels close to the ECB’s 2% target, potentially reducing pressure on policymakers when deciding the future path of interest rates.

 

Nvidia Stock Hits Fresh Record High on Expanding AI Investments

Nvidia’s stock surged to a new record during Tuesday’s trading, boosted by strategic deals that strengthened its position at the center of the AI revolution.

• The Nasdaq-listed stock (NVDA) rose 2.43% to $186.27 by 9:29 p.m. KSA time, after touching an all-time high of $187.35 before paring some gains.
• The company’s market capitalization climbed to $4.526 trillion, with the stock set to end the quarter with nearly 18% gains.
• This performance followed Nvidia’s announcement last week of a $100 billion investment in OpenAI, along with plans to build massive data centers worth hundreds of billions of dollars powered by its GPUs for the developer of ChatGPT.

U.S. Energy Information Administration: Oil Production Surges Above 21 Million bpd

The U.S. Energy Information Administration (EIA) released key updates Tuesday regarding oil production in July, revealing an unprecedented surge after revising weekly data.

• Total U.S. liquid fuels production reached 21.218 million barrels per day, about 500,000 bpd higher than previous estimates.
• Crude oil output stood at 13.642 million bpd, while natural gas liquids production was 7.577 million bpd, both above expectations.
• The EIA also raised its estimate for product supplied—the measure of demand—to 20.984 million bpd, up 344,000 bpd from prior weekly figures.

This revision indicates that earlier weekly data had understated actual production and demand, meaning the gap between supply and demand in the U.S. market is narrower than previously thought, and that stockpile increases were not as substantial as earlier reported due to robust consumption.

 

Outlook

Overall, the global economic picture shows a relative balance, with easing inflation and stable monetary policy in Europe, booming technology led by Nvidia, and the U.S. reclaiming leadership in energy through record oil production. These developments are poised to leave a lasting impact on market trends in the final quarter of the year.

The UK’s Office for National Statistics released revised Q2 economic growth data on Tuesday morning, showing mixed results compared to market forecasts.

• GDP grew 0.3% quarter-on-quarter in Q2, in line with the preliminary reading and analysts’ expectations, after a strong 0.7% growth in Q1.
• On an annual basis, the economy expanded 1.4% by the end of Q2, exceeding both the earlier estimate and market expectations of 1.3% growth.

Copper Falls as China’s Industrial Contraction Continues for Sixth Straight Month

Copper prices declined on Tuesday amid growing investor concerns over weak demand following data that showed China’s industrial activity contracted for the sixth consecutive month.

• On the London Metal Exchange, three-month copper futures fell 0.65% to $10,348.5 per ton as of 12:40 p.m. Mecca time.
• This drop follows a 2% weekly gain last week, supported by U.S.-based Freeport-McMoRan’s announcement that it had halted production at Indonesia’s Grasberg mine, the world’s second-largest copper mine, after a mudslide killed several workers.

Economic data released today showed China’s manufacturing PMI rose to 49.8 in September from 49.4 in August, but remained below the neutral 50-point threshold separating growth from contraction—confirming continued pressure on China’s industrial sector.

These developments paint a dual picture of the global economy:

• On one side, the UK economy bolsters market confidence by exceeding annual growth expectations.
• On the other hand, investor concerns persist over China’s slowdown and its drag on commodity prices.

Between European growth and Asian challenges, the global economic outlook remains closely tied to upcoming data and central bank policy decisions.

Global markets have recently witnessed notable events reflecting the interplay between monetary policy, economic factors, and trends in the electric-vehicle industry. On one hand, the Bank of Japan’s meeting minutes revealed ongoing debate among board members about the path of interest rates amid close monitoring of global developments. On the other, Chinese automaker BYD outperformed rival Tesla in European electric-vehicle sales for the second month in a row.

 

Bank of Japan Minutes Signal Potential for Continued Rate Hikes Amid Global Uncertainty

The minutes from the Bank of Japan’s July meeting, released Thursday, highlighted differing views among board members regarding the future of monetary policy, with general agreement that raising interest rates remains an option if the economy and prices continue to move as expected.

Several members noted that the U.S.–Japan trade agreement has helped reduce economic uncertainty but stressed the need to closely watch tariffs, which could exert pressure on growth and prices.
One member said the baseline scenario still points to a temporary slowdown in growth and core inflation, while another emphasized monitoring the impact of the January rate hike.

Some members remarked that monetary policy remains below a neutral stance, warning that excessive caution could mean missing an appropriate window to raise rates. Others suggested the bank might soon move away from its wait-and-see approach and begin increasing rates—possibly this year—if the U.S. economy proves resilient and Japan’s economy is not significantly affected.

Conversely, several members urged patience, calling for more data before taking new steps, given potential shifts in U.S. Federal Reserve policy and currency-market volatility tied to inflation and labor-market conditions in the United States.

 

BYD Surpasses Tesla in EU Electric-Vehicle Sales for the Second Straight Month

Chinese automaker BYD outperformed U.S. rival Tesla in European Union car sales in August for the second month in a row, with BYD’s sales nearly triple Tesla’s, according to data from the European Automobile Manufacturers’ Association.

Overall EU car sales rose 5.3% in August, driven by increases of 30.2% in electric vehicles, 54.5% in hybrids, and 14.1% in plug-in hybrids.
BYD’s EU sales surged 201.3%, lifting its market share to 1.3%, while Tesla’s sales fell 36.6%, reducing its share to 1.2%, down from 2% a year earlier.

Meanwhile, Stellantis—parent company of brands such as Peugeot, Fiat, and Chrysler—returned to growth in European sales for the first time in over a year, benefiting from improved market demand.

 

These developments underscore a complex global economic landscape. Central banks strive to balance monetary stability and growth, while electric-vehicle manufacturers wage intense competition to reshape the European market. The future will depend on the resilience of major economies and how markets respond to these rapid changes.

Global markets on Wednesday morning witnessed the release of key economic indicators reflecting a mixed picture of the international economy. From falling business confidence in Germany to accelerating inflation in Australia, and a sharp rise in Alibaba’s stock fueled by expanded AI investments, investors are watching how these developments may shape global market movements in the coming period.

 

German IFO Business Climate Index Falls to 87.7 in September

The IFO Institute for Economic Research released its German Business Climate Index data for September on Wednesday morning, which came in below market expectations at 87.7 points.
Forecasts had pointed to 89.3 points, while the previous August reading was revised slightly to 88.9 from 89.0.
This index is a key gauge of the health of the German economy, reflecting trends in spending, hiring, and investment through a survey of about 9,000 companies. Changes in its readings are considered an early signal of future economic activity.

 

Australian Inflation Accelerates to 3%, Highest in a Year

Australia’s National Bureau of Statistics reported Wednesday that the Consumer Price Index (CPI) rose at a faster-than-expected pace in August.
Annual inflation climbed to 3%, the highest level in a full year, compared to 2.8% in July. The reading exceeded market forecasts of 2.9%.
Australian inflation data are a key measure of consumer prices and the health of the domestic economy, and they strongly influence financial markets and the local currency.
This latest increase is likely to intensify pressure on the Reserve Bank of Australia to consider further interest-rate hikes to contain inflation, a move that could significantly impact the Australian dollar in the coming period.

 

Alibaba Stock Jumps to Highest Level Since 2021 on Expanded AI Investments

Shares of Alibaba Group Holding, listed on the Hong Kong Stock Exchange, surged after the company announced plans to expand its investments in artificial intelligence and launch new products. Key details include:

• The stock rallied to its highest level since 2021 following the company’s announcement of increased AI investments and new product launches.

• At the annual Alibaba Cloud Conference, CEO Eddie Wu said the company will continue to boost spending on AI models and infrastructure, outlining an ongoing three-year, 380 billion yuan (≈ $53 billion) investment plan.

• Wu told CNBC: “We are vigorously developing a three-year, 380 billion yuan AI infrastructure initiative and plan to maintain and increase our investments in line with our strategic vision for the era of advanced artificial intelligence.”

• The company also unveiled the latest version of its large language model Qwen3-Max, along with a series of other updates to its AI product suite.

• Alibaba’s share price jumped 6.34%, reaching HK$169.4, marking its best performance in nearly three years.

These developments highlight a mix of challenges and opportunities in the global economic landscape. While Germany faces pressures on business confidence and Australia confronts renewed inflationary forces that may prompt tighter monetary policy, Chinese companies such as Alibaba are capitalizing on the strong momentum in artificial intelligence—factors that could drive significant moves in financial markets and currencies in the months ahead.

Amid political tensions and rapid economic and technological changes, the global landscape is shifting in major ways. From managing TikTok algorithms for U.S. users to NVIDIA’s massive investment in OpenAI and the Eurozone’s economic rebound led by Germany, these events define an evolving global scene.

Oracle to Manage TikTok Algorithm for U.S. Users

A senior official in President Donald Trump’s administration said Monday that Oracle will oversee a U.S.-based version of TikTok’s recommendation algorithm, a move aimed at addressing national security concerns about Chinese parent company ByteDance’s control of user data and content.
The official, speaking anonymously, added that investment firm Silver Lake will be among the stakeholders in the deal.
Former President Joe Biden had previously signed legislation requiring ByteDance to sell TikTok’s U.S. assets or face a ban, while Trump repeatedly extended the deadline to secure an agreement that keeps the app available in the United States.
This step follows a Friday call between Trump and Chinese President Xi Jinping, part of ongoing efforts to decide the fate of the app used by roughly 170 million Americans.

NVIDIA to Invest $100 Billion in OpenAI for Massive AI Data Centers

The business relationship between NVIDIA and OpenAI has entered a new phase. The U.S. chipmaking giant—considered the primary driver of the AI boom and the world’s most valuable company—announced plans to invest up to $100 billion in OpenAI, developer of the ChatGPT chatbot, to build specialized AI data centers.
NVIDIA (NVDA) shares jumped 4% on Monday after the announcement, lifting year-to-date gains to more than one-third, fueled by surging demand for its advanced AI chips.
“This infrastructure investment and partnership mark the next leap toward the future—we will deploy 10 gigawatts of capacity to power a new era of intelligence,” said CEO Jensen Huang.
The company noted that the first gigawatt will begin operation in the second half of next year within its new Vera Rubin platform.
OpenAI CEO Sam Altman said the collaboration will “create new AI breakthroughs and enable individuals and businesses to benefit on a large scale.”
Both companies expect to finalize the partnership details in the coming weeks.

Eurozone Economy Records Fastest Growth in 16 Months, Driven by Germany

Economic activity in the Eurozone accelerated in September at its fastest pace in sixteen months, fueled by strong growth in Germany despite continued weakness in France.
The S&P Global composite Purchasing Managers’ Index (PMI) rose to 51.2 from 51.0 in August, beating expectations for no change. A reading above 50 signals economic expansion.
The services PMI climbed to 51.4, its highest in nine months, from 50.5, while the manufacturing PMI slipped to 49.5 from 50.7, remaining below the growth threshold.
Despite the improvement, the stabilization of new orders after August’s growth raises questions about the sustainability of this momentum.

These developments highlight a blend of challenges and opportunities shaping today’s world—whether in technology and artificial intelligence or in the major economies. As Washington works to secure citizens’ data and corporate giants invest in a new digital future, Europe’s growth indicators offer a measure of optimism for a more balanced global economy in the coming phase.