U.S. Markets
U.S. stock futures are trading lower today due to growing uncertainty surrounding U.S.-Iran negotiations. At the time of writing, S&P 500 futures are down around 0.5%, while Nasdaq futures are lower by nearly 0.68%.
Risk sentiment deteriorated after reports confirmed that planned U.S.-Iran talks in Switzerland have been postponed. The delay has raised concerns that negotiations surrounding Iran’s nuclear program and broader regional issues may prove more difficult and prolonged than initially expected. With markets increasingly sensitive to geopolitical headlines, investors appear reluctant to hold aggressive long positions heading into the weekend, particularly after a series of major geopolitical surprises over the past two years.
The cautious mood follows a strong but narrow rebound in U.S. equities on Thursday. Stocks recovered much of Wednesday’s post-FOMC weakness as investors digested Chair Kevin Warsh’s hawkish debut. The S&P 500 ended the holiday-shortened week up 0.9%, marking its eleventh positive week in the last twelve.
Beneath the surface, however, market leadership remains highly concentrated. Semiconductor stocks continue to dominate performance, with the SOX index surging to fresh record highs as investors remain committed to the AI trade. At the same time, broader market participation remains uneven. Seemingly, investors are still favoring a small group of AI-linked winners while remaining cautious on the broader market.
Options positioning is also becoming less supportive. SpotGamma notes that Friday’s large June options expiration will remove a significant amount of positive gamma exposure that has helped suppress volatility during the recent rally. Following the Fed meeting, traders increased downside hedging activity through put buying, pushing both the VIX and VVIX higher. As a result, equities may face greater volatility in the weeks ahead as the market adjusts to a less supportive options backdrop.
Looking ahead, investors will closely monitor upcoming economic releases, including nonfarm payrolls and CPI, which are likely to determine whether the recent rebound can be sustained. For now, a combination of hawkish Fed expectations, geopolitical uncertainty, and fading options support is keeping risk appetite in check.
On the technical front, the SPX remains anchored around the 7,500 level, a key pivot for both price action and options positioning. Today the index took support from the confluence of a descending trendline on the hourly charts and 8-day EMA of 7,517. This level should act as immediate support. On the upside, the index could face resistance at 7,560 levels.
U.S. Dollar Index (DXY)
The dollar index is up 0.1% today, and is currently at 100.92.
From a fundamental standpoint, the dollar index continues to get support from the hawkish Fed. This is because concerns over inflation did not completely subside, as it may take some weeks or months for tanker traffic to return to normal. Traders have now fully priced in a rate hike by October as the Fed focuses on price stability over employment. In line with the same, currency traders, including hedge funds, are loading up on options wagers that the dollar will extend gains after the Federal Reserve’s hawkish policy decision.
From a technical standpoint, the dollar index has broken out of the triangle formation that we have been reiterating this week. Furthermore, it has recaptured support at the 100 price level, reinforcing a bullish stance in the weeks ahead. From an intraday perspective, pullbacks to 100.75 and 100.50 are attractive levels.
Gold & Silver
In yesterday’s session, gold fell by almost 1% as a hawkish Federal Reserve meeting and rate-hike bets outweighed the signing of an interim peace deal between the US and Iran. This is because concerns over inflation did not completely subside, as it may take some weeks or months for tanker traffic to return to normal. Traders have now fully priced in a rate hike by October as the Fed focuses on price stability over employment. The view is also reflected in global ETF holdings, which have receded to their lowest level since November. The global gold holdings in ETF’s have fallen from a peak of 3,100 tons in Feb to $3,000 tons at present.
Technically, the yellow metal is down by almost 18% since the war started. It is currently trading at $4,155, below the 200-day EMA at $ 4,370. The 200-day EMA has acted as strong resistance over the past few sessions, with multiple rejections. On the weekly charts, it is set to close below the 50-week SMA at $4260. This can trigger a move towards recent lows of $4000, followed by $3900. On the contrary, for it to turn bullish, it should break and close above the 50-week EMA level at $4260.
Silver is trading at $64.80 and broke below the 200-day EMA at $68. A break below this level will likely lead to a test of the recent lows at $63.3. It is now testing its 50-week EMA level at $63.10. A break below this support may trigger a move towards $60, followed by $54.5. On the contrary, for it to turn bullish, it should break and close above the 200-day EMA level at $68.
Crude Oil
Oil is seeing a brief pause in its decline as US-Iran talks hit an early snag . Both WTI and Brent recovered from their lows yesterday and closed marginally higher. In today’s session, oil prices are trading higher as markets’ optimism over a concrete US-Iran deal takes a hit. WTI is up 1.2% around $78, and Brent is trading 0.9% higher at around $81.
The Israeli military said it carried out strikes overnight in Lebanon. The Swiss Foreign Ministry confirmed that talks planned for the day will not take place. This raised questions over the peace deal that went into effect yesterday, and oil prices found some support. On the other hand, Hormuz flows were seen at the strongest pace since the war began. Ships carrying stranded oil have begun to make their way out of the waterway, while Kuwait said that it will start ramping production back up. On Thursday, vessels carrying nearly 10 million barrels of oil appeared outside the strait or were sailing through, including the first Saudi-owned tankers since the conflict began. US VP JD Vance remarked that 12.5 million barrels of oil had passed through the Strait of Hormuz the night before. That figure might be the highest tally since the closing of the Strait. ADNOC told customers to resume loading of its crude oil from ports within the Persian Gulf. This would keep a lid on oil prices and point to a structural downside unless further developments in the Strait impede the flows.
Technically, WTI could face some selling pressure toward $80, a major resistance level. The descending channel acts as another barrier to WTI’s leg higher. A break above $80 could see a retest of $85 as the second resistance level. On the flip side, support could be around $73-$74 (close to the 200-day SMA), followed by $70. WTI’s near-term upside is visibly capped, and the path to least resistance points to the downside unless the conflict resumes.
