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By Caroline Valetkevitch NEW YORK (Reuters) -Major stock indexes rose on Wednesday, with U.S. and European indexes hitting record highs, while gold extended its recent rally above $4,000 an ounce as a prolonged U.S. government shutdown and expectations of further U.S. interest rate cuts drove demand for the safe-haven asset. Gold, traditionally seen as a store of value during times of instability, is up 54% year-to-date after gaining 27% in 2024. Spot gold was last up 1.36% at $4,037.90. U.S. gold futures GCv1 for December delivery settled 1.7% higher at $4,070.5. Silver also climbed to a record high. Shares of gold miners also rose, including U.S.-listed shares of Gold Fields, which ended 3.7% higher. The Japanese yen reached its weakest level since mid-February against the dollar as investors worried about an increase in fiscal spending in Japan, while the euro eased on ongoing political uncertainty in France. On Wall Street, stocks rebounded from Tuesday's declines, with the S&P 500 and Nasdaq registering all-time closing highs and technology shares leading the way higher. Nvidia shares ended 2.2% higher. "It comes down to investors have been optimistic since April, and that optimism continues to be expressed in spite of a government shutdown, a slowing employment market or any other red flags that would normally detract investors," said Oliver Pursche, senior vice president and advisor for Wealthspire Advisors in Westport, Connecticut. Investors have been without most U.S. economic data as the federal government remains shut. Minutes released Wednesday from the last Federal Reserve meeting showed a divided committee, in which policymakers were concerned about rising labor market risks but remained wary of inflation. The central bank is widely expected to cut rates by 25 basis points at its October 28-29 meeting, according to the CME Group’s FedWatch Tool. The Dow Jones Industrial Average slipped 1.20 points to 46,601.78, the S&P 500 gained 39.13 points, or 0.58%, to 6,753.72 and the Nasdaq Composite gained 255.02 points, or 1.12%, to 23,043.38. European shares climbed to record highs, powered by strong gains in French and Spanish stocks. The pan-European STOXX 600 was up 0.8%, closing at its highest level, while French stocks jumped 1.1% and Spanish stocks touched their highest mark since 2007. French caretaker Prime Minister Sebastien Lecornu said a deal could eventually be reached on a 2026 budget despite the country's political crisis. France's fifth prime minister in two years, Lecornu tendered his and his government's resignation on Monday, just hours after announcing the cabinet line-up, making it the shortest-lived administration in modern France. The euro pared losses after Lecornu also said on Wednesday that President Emmanuel Macron could be in a position to nominate a new prime minister in the next 48 hours. The currency was last down 0.33% at $1.1616 and reached $1.1597, the lowest since August 27. In Japan, the surprise election of Sanae Takaichi to lead the country's ruling Liberal Democratic Party on Saturday has dented the yen on expectations of greater government stimulus. Against the yen the dollar was last up 0.53% at 152.7. It earlier reached 152.99, the highest since February 14, and has risen from 147.44 on Friday. U.S. Treasury yields turned positive in afternoon trading after investors showed tepid demand at an auction of 10-year notes. The yield on the benchmark U.S. 10-year Treasury note was up 0.6 basis points to 4.133%. Oil prices rose. Traders expected a lack of progress on a Ukraine peace deal to keep sanctions in place against Moscow. U.S. crude rose 82 cents to settle at $62.55 a barrel and Brent gained 80 cents to settle at $66.25. (Additional reporting by Amanda Cooper and Joice Alves in London and Ankur Banerjee in Singapore; Editing by Emelia Sithole-Matarise, Alexandra Hudson, Diane Craft and Daniel Wallis)

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By Walter Bianchi BUENOS AIRES (Reuters) -Argentina's Treasury is rapidly depleting its dollar reserves to defend the peso, straining financial markets on Wednesday as funds from a special deal with agricultural exporters run low weeks before midterm elections. Traders estimate the Treasury, under the Economy Ministry, has sold around $2 billion in recent sessions to support the weakening peso. The ministry does not publicly report its market operations. The interventions have rapidly depleted the Treasury's hard currency holdings. According to a report from Portfolio Personal Inversiones, dollar deposits held at the central bank plunged from $1.44 billion last Friday to just $680 million, leaving only "a few more days" of intervention capacity at the current pace. The Treasury has now sold off over three-quarters of the hard currency it raised from the export scheme, according to consultancy Wise Capital. Late last month, the government suspended export taxes on grains and their byproducts. Within a few days, traders committed to selling some $7 billion worth of crops, largely soybeans to China. Cash poured in, but the deal has stoked tensions with Washington, as U.S. farmers have been frozen out of the Chinese market due to a tariff standoff. The pressure is mounting ahead of Argentina's legislative elections on October 26, seen as a crucial test for libertarian President Javier Milei's administration. In a bid to calm markets, Economy Minister Luis Caputo is in Washington negotiating a potential $20 billion currency swap deal. An announcement could follow a planned meeting between Milei and U.S. President Donald Trump next week. IMF Managing Director Kristalina Georgieva told Reuters the fund is working closely with the U.S., the World Bank and the Inter-American Development Bank to develop an aid package for Argentina. On Wednesday, the wholesale peso held at 1,430 per dollar, but the parallel rate used for moving money abroad climbed to 1,556 per greenback, widening the exchange-rate gap to nearly 9%. The consensus among economists is that the current intervention strategy is a temporary bridge until the election. A new, freer foreign-exchange regime is widely expected afterward, with its implementation dependent on the election results and securing U.S. financial support. In asset markets, sovereign bond prices fell by an average of 1%. In contrast, the S&P Merval stock index reversed early losses to close up 1.42%. Meanwhile, shares in aluminum producer Aluar jumped 2.93% after the government temporarily suspended export tariffs on the metal. (Reporting by Walter Bianchi in Buenos Aires; Additional reporting by Rodrigo Campos in New York; Editing by Marguerita Choy and David Gregorio)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)