US Markets
US equity indices closed higher yesterday as earnings momentum continues. SPX rose 1.8% to $7,750, a new record, and NDX jumped 3%. In today’s session, both indices are marginally higher, with SPX trading around $7,770. The outlook for today is bullish.
Strong earnings results from Palantir and Caterpillar helped pull stock indexes higher. Palantir was the best-performing stock in SPX yesterday, rising close to 30%. SpaceX also reported earnings, reporting $7.8 billion in revenue for the April-to-June quarter, up 92% from the same period last year. The company posted a net loss of $541 million. Shares fell roughly 6% in after-hours trading. AI infra and semiconductor names that performed well were Marvell Technology, Coherent, Sandisk and Intel, notching gains above 10%. A key trigger yesterday was a Reuters report on the FCC’s plan to ban certain crucial data-centre components imported from China, particularly optical transceivers. This move will benefit domestic players such as Lumentum, Coherent, and Corning. All these stocks gained more than 8% yesterday. Earnings today include Eli Lily and SanDisk, among others. On the economic front, JOLTS openings fell moderately, while the Balance of Trade deficit narrowed. In today’s release, ISM Services is an important datapoint. Crude prices resumed their decline, providing support to equities
Technically, the SPX continues its trend higher. Resistance is likely around $7,800, followed by $7,850. On the downside, initial support lies around $7,660, making this an attractive zone for long entries on any pullback. Stronger support is around $7,600, close to yesterday’s breakout zone. The 14-day RSI is near 65, indicating bullish momentum with room for further upside.
Gold & Silver
Gold extended its rally for a third consecutive session, rising 2.34% to $4,172 oz, as improving prospects for an agreement to reopen the Strait of Hormuz helped ease inflation concerns and reduced expectations for further Federal Reserve tightening.
Market sentiment was supported by reports that the US, Iran, and Oman are nearing an interim agreement to normalise shipping through the strategic waterway. The potential easing of geopolitical tensions has prompted investors to scale back expectations for additional rate hikes, with markets now fully pricing in just one Fed rate increase by year-end, compared with two expected only a week ago. Lower interest-rate expectations are generally supportive of non-yielding assets such as gold.
In spite of some assertive comments from Federal Reserve officials, the central bank’s choice to keep interest rates steady for the fifth meeting in a row has strengthened beliefs that monetary policy could be less strict than expected.
Additional support for bullion continues to come from China, where gold-backed ETFs recorded a 14-day streak of inflows, the longest since March. The renewed institutional demand suggests improving investor sentiment in the world’s largest bullion market and has helped keep prices above the psychologically important $4,000/oz level.
Gold (XAU/USD) has recorded gains for a third consecutive session, trading above $4,170 after surpassing the upper edge of its ascending channel. This upward movement is backed by reduced expectations of Federal Reserve rate increases, with the market anticipating only one more rate hike by the end of the year, while renewed investments in Chinese gold ETFs support demand.
From a technical perspective, a consistent break above $4,180 would enhance the bullish sentiment and open the door to $4,229, and possibly $4,300, while support levels are identified at $4,139 followed by $4,112.
Silver also gained strongly, up nearly 4%, reaching $61.80 after successfully breaking through the peak of its multi-week consolidation range. This breakout indicates strengthening bullish momentum, with $63 identified as the next significant target for an upside move. Initial support is now located at around $61.
Crude Oil
Oil prices retreated sharply in yesterday’s session, with WTI and Brent down almost 6% after a report that Washington, Tehran and Oman were nearing an agreement to reopen the Strait of Hormuz. Trump also said that talks with Iran are progressing well, further pressuring oil prices. Meanwhile, Saudi Arabia continued talks with Yemen’s Houthis to prevent the Red Sea conflict from escalating further. In today’s session, oil is marginally higher but remains under pressure, as a short-term deal could help normalise commercial shipping in the strait. This could also ease inflation concerns and the consequent fears of a rate hike. This is reflected in 30-year yields retreating to 5.16% from their peak at 5.3%. This backdrop remains supportive for risk assets globally.
Technically, WTI is trading at $76.66, below the 9- and 21-day EMAs on the daily chart. Prices have broken below the 200-day EMA on the daily time frame. The daily RSI is also trending below 50, indicating weakening upside momentum. On the 4-hour chart, prices are hovering near immediate support at the 61.8% Fibonacci level of $76.7, drawn from the 2nd July low to the 23rd July high. A confirmed break and close below this level could push prices towards $72.4. Resistance is seen at $81, the level of the downward trendline connecting the highs of 23rd and 31st July. A break above this trendline could push prices towards $84.
Brent is trading at $84, below the 9- and 21-EMAs and has also crossed below the 200 EMA on the daily chart. A break below its immediate support at $81.8 may lead to a test of the $72 level seen at the start of the month. Conversely, prices must cross above $87 for bullish momentum to pick up.
US Dollar Index
The greenback is holding steady as markets closely monitor developments surrounding the Iran conflict. Optimism improved slightly after U.S. Treasury Secretary Scott Bessent indicated that a deal with Iran could be reached by Wednesday, while Secretary of State Marco Rubio said negotiations to reopen the Strait have made progress, although a final agreement has yet to be reached. Easing geopolitical tensions could reduce safe-haven demand for the dollar.
Meanwhile, the dollar continues to face headwinds after the U.S. reaffirmed its support for Japan’s efforts to strengthen the yen following last week’s coordinated intervention, reinforcing expectations for a softer dollar bias.
Looking ahead, traders will focus on the July ADP private payrolls report and the July ISM Services PMI, both of which could shape expectations for the Federal Reserve’s policy outlook and drive the next move in the dollar. At the time of writing, the dollar index trades at 99.83.
For intraday traders, the outlook remains bearish as long as the DXY stays below the key resistance of 100.21, with the 9-day EMA at 100.30 acting as an additional resistance. If the index moves above these levels, it could test the next resistance at 100.51 (horizontal base resistance). On the downside, 99.41, the current week’s low, is the immediate and key support. EUR/USD pair is currently trading at 1.1537, at the resistance (downward-sloping trendline resistance). A bearish trade can be taken for this pair. It has immediate support at the 9 Day EMA at 1.1489 and immediate resistance at 1.1559.
