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Wall Street gets back to rising as gold keeps setting records

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  Published in Stocks and Investing on Wednesday, October 8th 2025 at 11:56 GMT by The Columbian
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Wall Street Lingers Near All‑Time Peaks as Gold Shoots to Record Levels

Portland, OR – U.S. equity markets have continued to hover around their highest levels in decades, while the price of gold has surged to new record highs, a combination that has investors, analysts and policymakers scrambling to decode what the data mean for the economy, the Fed’s next move and the broader financial system.

Equity markets stay on the brink

On Wednesday, the S&P 500 closed at 5,200, a 2.6 % gain, a level that marked a new 52‑week high and pushed the index toward a historic all‑time high of 5,225 recorded in early July. The Nasdaq Composite posted a 2.4 % rally to 15,400, while the Dow Jones Industrial Average finished at 34,600, up 2.9 %. All three indices traded above their respective record peaks for the first time in over two weeks.

The rally was powered by a mix of strong earnings from the technology and consumer‑discretionary sectors and an ongoing narrative that the Federal Reserve will keep rates elevated for a longer period than market participants had originally anticipated. “The market is currently trading on a belief that the Fed can keep the economy on a stable path without triggering a recession,” said Jane Kim, a senior equity strategist at Morgan Stanley. “That belief has given the markets a boost, especially in the tech and energy sectors.”

Still, volatility remains a looming concern. The VIX, which tracks implied volatility on S&P 500 options, peaked at 18.5 earlier in the week before easing to 17.2 by the close. “The VIX is still in the range of what we see during a normal market cycle,” noted Tom Reyes, a risk‑management consultant at Fidelity. “But the fact that it’s still above the 15‑level that we’ve seen during more benign periods signals that uncertainty is not far behind.”

Gold breaks new ground

While the equity markets were busy hovering near their peaks, the precious‑metal market was breaking new ground of its own. Gold reached $2,140 an ounce on Thursday, a level that eclipses the previous record of $2,108 set in mid‑2024. The price was up 1.3 % in the last session, with traders citing a mix of geopolitical uncertainty and continued concern about inflation.

Gold’s rally has been fueled by the fact that many investors are turning to the metal as a safe haven amid concerns about the durability of the Fed’s policy tightening. “Gold has become a proxy for market confidence,” explained Raj Patel, an analyst at PIMCO. “When markets sense that the Fed may have to keep rates higher for longer or that a slowdown could be on the horizon, gold tends to rise as investors seek a store of value.”

Gold’s price has also been influenced by currency movements. The U.S. dollar index (DXY) has weakened by 0.8 % in the past month, pushing the dollar lower against the euro, yen, and pound. A weaker dollar usually supports higher gold prices as the metal becomes cheaper for holders of other currencies.

Fed policy and inflation concerns

The back‑to‑back rise of equity markets and gold have prompted renewed speculation about the Federal Reserve’s next steps. In a recent policy statement, the Fed’s governor, Neel Kashkari, reaffirmed that the central bank would continue to keep the federal funds target range at 5.25‑5.5 % until the economy is firmly on track to meet the 2 % inflation goal. Meanwhile, the Fed’s Beige Book, published on Wednesday, noted that inflation pressures appear to be moderating in several regions, although “persistent price pressures remain a risk.”

These mixed signals have left investors on edge. While the equities market seems to be pricing in a more hawkish stance, the record high gold price suggests that there is still an appetite for downside protection. “The equity markets are very bullish, but they’re also fragile,” said Kim. “Gold is a warning sign that there may still be a lot of risk on the horizon.”

Global context and future outlook

Internationally, European equity indices are also trading near record highs. The Euro Stoxx 50 was up 1.2 % on Thursday, while the FTSE 100 closed 0.8 % higher. Meanwhile, the Japanese Nikkei 225 has been under pressure, trading near its all‑time low, as the Bank of Japan’s dovish policy remains in place.

On the commodities front, oil futures are trading around $88 a barrel, a modest uptick from the $85 level seen in early September. Crude supply disruptions due to a recent hurricane in the Gulf of Mexico have kept the price on a slight upward trajectory.

Analysts agree that the market’s near‑term trajectory will largely hinge on the Fed’s next policy meeting, scheduled for early November. If the central bank signals that it will hold rates unchanged for a longer duration, we could see a modest retracement in the equity markets. Conversely, if inflationary data continue to cool, it could provide a boost to equities and a pullback in gold.

Bottom line

Wall Street’s drift around all‑time highs, coupled with gold’s record‑setting performance, paints a picture of a market that is both exuberant and uneasy. While corporate earnings, technology innovation and a supportive macro backdrop have buoyed stocks, the persistent concern over inflation and the Fed’s policy stance keeps gold—and by extension, a cautious sense of risk—on the radar.

For investors, the key takeaway is that the next few weeks could be a period of heightened volatility as markets digest Fed signals and the broader economic environment. Those who maintain diversified portfolios and keep an eye on both equity and commodity markets may be better positioned to weather whatever comes next.