- U.S. Markets
The S&P 500 Index and the Nasdaq 100 Index are up 0.87% and 0.97% in the early sessions of Monday and are currently trading at $6,680 and $24,555, respectively.
From a fundamental standpoint, the main pressure on equity markets has been the rise in oil prices. Over the weekend, the US carried out a strike on Kharg Island, Iran’s key oil export terminal. Although oil infrastructure was not damaged, the attack raised concerns among oil traders, Bloomberg reported. Historically, markets have faced negative returns only when oil prices have remained above $100 for 10 consecutive days. Looking at the current situation, despite the rally in oil prices, WTI has failed to close above $100. A sustained close above $100 for 11-20 days has historically resulted in a 3-month return of about -0.5%, while a sustained price above $100 for 30 days has resulted in a 3-month return of -6.4% and a negative 12.3% over 12 months. In line with this, JPMorgan warns of a 10% correction in the S&P 500 if oil prices stabilise at $100 per barrel. From a data standpoint, the Industrial Production data and earnings from Dollar Tree are expected to garner attention today. Furthermore, the Fear & Greed Index for the stock market has entered the extreme fear zone for the first time this year. The only sectors expected to perform positively in the week include fertilisers, defence, utilities and energy.
From a technical standpoint, both indices have bounced from the 200-day SMA at $6,625 and $24,370. However, on the weekly timeframe, both indices have closed below major weekly supports of $6,730 and $24,710. These levels had served as major support for the indices since mid-December. Thereby suggesting the possibility of a dead cat bounce at this level, to retest the breakdown. Hence, overall, a bearish stance is expected to continue from the retest of the $6,730 and $24,710. These levels also coincide with the 8-day EMA.
- Gold & Silver
Gold has started the week in green after two consecutive weeks of falling. It is holding above $5,000 in early Asian trading, as investors balance heightened geopolitical tensions with a stronger dollar. The metal briefly dipped toward $4,970 before recovering, as markets assess developments surrounding the ongoing US-Israel conflict with Iran and its impact on global energy supplies.
The geopolitical conflict has pushed oil prices higher, raising concerns about inflation and lowering expectations for near-term Federal Reserve rate cuts. As per the CME FedWatch tool, markets are currently pricing in a negligible chance of a rate cut at the upcoming Fed meeting. Higher borrowing costs typically weigh on non-yielding assets such as bullion.
Strong inflows into the US dollar are emerging as a major headwind, potentially capping any sharp upside breakout in gold. Despite this, gold remains supported by persistent safe-haven demand and ongoing central-bank buying, with geopolitical uncertainty and stagflation concerns continuing to attract investors seeking protection against economic shocks. The metal is still up around 16% YTD, highlighting the trend’s underlying strength.
Technically, gold appears to be finding support at its 50-day SMA level of $4,940. Resistance for the yellow metal is seen at Friday’s high of $5,128. While near-term moves may remain sensitive to dollar and rate expectations, unresolved geopolitical risks could keep downside limited and support renewed buying interest on dips. Silver remains under pressure, trading around $80.40 (-0.2%). Resistance may be seen at the 20-day SMA at $84, while support lies around $77, a previously tested level.
- U.S. Dollar Index
The dollar ended a volatile last week at its highest level this year, $100.49. It closed out its second straight weekly gain, up by almost 2.8% since the Middle East crisis started. This highlights a strong appetite for the greenback as a haven amid the ongoing geopolitical developments and surging energy prices. It’s trading around $100.30 in the current session.
On a fundamental level, the dollar remains bullish. DXY will track advances in crude prices, which closed around $100 a barrel on Friday. Any headlines elevating the crisis will support crude prices and drive haven flows to DXY. It is also likely to garner further support unless the Fed surprises by keeping rate cuts on the table, or should the ECB and BOJ both turn aggressively toward preparations for tightening. The Fed is set to announce its interest rate decision during its March 17- 18 meeting, and markets are pricing in a near-certain rate hold. Traders continue to curb expectations for how much the Fed will cut rates this year amid rising inflation concerns. They are no longer fully pricing in a reduction this year. compared to before the war, when they were expecting two cuts. According to Bloomberg, flows from institutional investors are the strongest in nearly two years. Speculative trades slashed their bets against the greenback by nearly 67%, as per CFTC data for the week ended March 10. European Central Bank (ECB) and the Bank of England (BoE) are widely expected to leave interest rates unchanged at their meetings this week. Any guidance on inflation risks and the timing of future rate cuts could still trigger significant volatility across FX markets. Swaps pricing indicates markets expect the ECB to tighten monetary policy faster than previously thought due to rising energy costs and resulting fears of inflation.
Technically, DXY has near-term support at $100, followed by the 20-day EMA at $99.82 on the 4-hour chart. Resistance could be near last Friday’s high at $100.49, followed by the $100.60-$100.70 zone. EUR/USD has support from Friday’s close of 1.141, while resistance could be around 1.151. The currency pair is biased lower due to the dollar’s strength.
- Crude Oil
Oil prices exhibited considerable volatility last week amid the ongoing Middle East tensions, with oil futures rising about 40% over the past two weeks. Since then, oil has pared some of those gains but remains elevated after the U.S. attacked military targets on Iran’s Kharg island on Friday, while threatening to attack the nation’s energy infrastructure next. Meanwhile, crude flows through the Strait of Hormuz remain affected by the closure, sparking a surge in premiums for physical barrels and fuel prices. This has forced certain producers to curtail pumping. In light of this supply disruption, the IEA intends to immediately release an unprecedented stockpile to Asia. On the other hand, Europe and America will receive supplies from the end of March, with no clarity yet on the volume or pace. Sunday’s statement revealed that the agency has received an implementation plan for the record 400 million reserve release announced last week. Saudi Arabia is offering long-term oil buyers the option to receive April shipments through the Red Sea port of Yanbu amid ongoing disruptions in the Strait of Hormuz. Buyers who choose to receive their cargoes through Yanbu will only get a portion of their usual monthly allocation, as pipeline capacity to the Red Sea port remains limited. Meanwhile, those opting to lift crude from the Persian Gulf could face delays if the Strait of Hormuz remains closed. To manage the disruption, Saudi Aramco has been ramping up shipments via Yanbu and is now offering contracted cargoes from the Red Sea terminal as an alternative export route.
After rallying 11% last week to touch a high of $119.50, which was a level observed after Russia’s attack on Ukraine in 2022, Brent is currently up 0.9% for the day at $104.78, with psychologically significant support at $100, which has also turned into a short-term next support around $95.45, while resistance is clustered near $105. WTI crude is currently trading near $99. The first area of support lies around $92–$93, corresponding to the previous breakout zone. This level has also acted as an intraday pivot in recent sessions. The next support range sits between $88 and $90, where buyers have previously stepped in during earlier pullbacks. On the upside, the $100 level remains the key psychological resistance. A sustained move above this threshold could attract fresh momentum buying and potentially open the door for a further advance toward $105.
