A fragile ceasefire, followed by the failure of the peace talks over the weekend, has sparked fresh volatility in global markets. In today’s session, the S&P 500 is down by almost 0.75% after Trump said US forces will begin clearing any mines in the Strait and will implement a blockade. This has further increased concerns about rising oil prices and inflation, pressuring equities. Investors are also closely watching the onset of earnings season in the US. The analysts project S&P 500 earnings to rise by 12% yoy, the weakest since Q2 2025. Comments from corporate leaders on mounting geopolitical risks and rising inflation will be closely scrutinised to gauge the markets’ forward trajectory. The CPI MoM data released on Friday came in at 0.9%, indicating that prices have risen at the fastest pace since 2022. A report from the University of Michigan also showed consumer sentiment fell to a record low in April, as inflation expectations rose. The Fed fund futures are also pricing in no chance of a rate cut in 2026. Hence, geopolitical events will also be closely tracked for any sudden turn in the events and investor sentiment. The market breadth indicates that the percentage of stocks above their 200-day moving average has fallen from the February high of 70% to 54%, last seen in November 2025.
Technically, the S&P 500 index is trading at $6,770 and has not decisively broken above the $6,800 resistance level. It opened with a gap down at $6,730 and has slightly recovered from that level. However, the daily 5-period RSI is overbought, indicating the momentum may cool down significantly. A rounding top formation is also observed on the daily charts. A breakdown below the $6,750 level will be negative for the index in the near term. On the 1-hour timeframe, a failure of the price acceptance above $6,800 can also be observed. The index finds near-term support at the 50-day EMA level at $6,718. Hence, a break below the $6750 level, followed by a 50-day EMA, may indicate further bearishness, with the next support at $6,540. Conversely, the index must give a break and close above the $6,800 level to indicate bullishness.
U.S. Dollar Index
As peace talks between Iran and the USA collapsed this weekend in Islamabad, the dollar rebounded 0.3% in early trading today on surging safe-haven demand, hovering around $99.
On a fundamental level, the dollar holds a unique position as geopolitical scenarios unfold. Its strength stems from the US being a net energy exporter, in contrast to its peers in the DXY basket, the Euro, JPY, and GBP, which are net importers of oil. As ceasefire talks took place on the 7th, the DXY dipped sharply to $98.52. This trade has unfurled since then as ceasefire talks collapsed. This is because Iran demanded nuclear enrichment rights, Hormuz sovereignty recognition, full sanctions relief, and war reparations. In retaliation, Trump has ordered a US Navy blockade of the Strait, starting at 10 am ET on Monday, injecting fresh uncertainty into markets over the duration of the conflict and lending further support to the dollar. Adding to this, Friday’s CPI print of 3.3% YoY deepens the Fed’s dual mandate dilemma; tame inflation or cushion a softening labour market. According to CME FedWatch, the probability of no rate cut on April 29 now stands at 96.4%, providing an additional tailwind for the dollar. Given the geopolitical premium and the dollar’s structurally unique position, it may remain well-supported in the near term.
On a technical level, the dollar is trading above its 50-, 100-, and 200-day SMAs. The immediate resistance potentially lies at $99.24, a level tested in March and January. Moving upwards, the next resistance lies at $99.39, aligning with the 9 Day SMA. On the downside, support lies at $98.85, the close of Friday. The MCAD on the daily chart is mildly recovering; however, on the four-hour chart, the MACD is pushing into positive territory at 0.05. On the daily chart, the RSI is trending upwards and has rebounded from 43.16 on Friday to 46.49 this morning. The recovery of these two indicators suggests that upward momentum may persist through the session, particularly if headlines remain supportive for the dollar.
Crude Oil
Oil ended last week 14% down as markets anticipated ceasefire talks between US-Iran. However, negotiations were unsuccessful and in fact now US will lead a naval blockade of the Strait of Hormuz starting Monday.
Upon this news, Brent surged above 7% to $103 a barrel and WTI rallied 8% to $104 on Monday. The US blockade would transform a regional fight into potentially a global fight, with a supply loss of up to 12 million barrels a day. If the Strait remains blocked from both ends, it is possible that oil prices could hit around $140-$150 per barrel.
On the daily chart, WTI is trading just at the 9 SMA and above the 21 SMA. The 5 period RSI is at 54, indicating a building bullish momentum. On the 1-hour chart, immediate resistance is at the $108 level which coincides with the 61.8 fib level, followed by $113, which is the 78.6 fib level. Support is seen at the key $100 level, followed by the $97.8 1st April breakout.
On the daily chart, Brent is just below the 9 and 21 SMA. The 5 period RSI is at 50, indicating that traders are slowly building back long positions. On the 1-hour chart, immediate resistance is at the $106 level which coincides with the 61.8 fib level and 200 SMA, followed by $110, which is the 78.6 fib level. Support is at the $100.6 level which coincides with the 21 SMA and 25th March breakout, followed by $97.7.
Gold and Silver
Gold came under sharp pressure in early trading today, dropping nearly 2% to $4,635, as markets reacted to a major escalation in the Middle East after the U.S. ordered a naval blockade of the Strait of Hormuz following the failure of peace negotiations between the U.S. and Iran. The move triggered a surge in oil prices, intensifying inflation concerns and shifting expectations firmly toward a higher-for-longer rate environment. A hotter US CPI data also reinforced the Fed’s higher-for-longer stance. Along with interest rate expectations, rising US Treasury yields and a firmer dollar have emerged as key headwinds, weighing on non-yielding assets such as gold.
However, despite the initial sell-off, gold has shown a modest rebound from today’s lows near $4,639, and is now trading around $4,730, supported by ongoing geopolitical uncertainty and hopes that diplomatic efforts for a truce between the US and Iran could resume.
From a technical perspective, on the daily charts, the metal has been trading within an ascending channel since March 23, with the lower trendline providing support around $4,700 today. Hence, gold retains a cautiously bullish bias for the day as long as it continues to hold above that level. Resistance could be seen around $4,775, the 50-day EMA level. The 100-day EMA at $4,627 could act as strong support for gold, followed by $4,580.
Silver also remains volatile, with a strong support seen around $72.31. The metal could remain rangebound between $72 and $77 amid ongoing uncertainty.
