US Markets
A surge in oil prices rippled through global markets, hitting stocks and bonds on worries that higher energy costs will fuel inflation and force the Federal Reserve to boost rates. The Nasdaq 100 Index recorded its worst day in two weeks on Tuesday and dropped 1.3%, after sliding as much as 1.7%, intraday. The S&P 500 Index fell 0.7%, with seven of its 11 major industry groups falling. Consumer discretionary was the worst performer, while energy led gains.
Chipmakers, which have surged on the back of the artificial-intelligence investment boom, pared some of their initial losses during the session. Nvidia Corp. fell 1.5% Tuesday, following a 2.6% slide after the opening bell. Advanced Micro Devices Inc. fell 2.4% while Micron Technology Inc. declined 2.6%. SanDisk Corp. slumped 1.9%.
Much of the pressure on Wall Street stems from a deepening global bond selloff, with rising yields weighing on stocks. Despite this, the VIX index, remained around 16 — a level that doesn’t typically signal market stress. Strong earnings and the promise of AI continue to put a floor under stocks broadly, limiting the magnitude of pullbacks. Rotations within equities rather than exits are limiting index moves.
Some corporate highlights are as follows: Dell Technologies Inc. cranked up its annual sales forecast by $25 billion, exceeding analysts’ estimates in a further signal of surging demand for servers to run artificial intelligence tasks. Apple Inc. Chief Executive Officer John Ternus touted the company’s strong product pipeline and teased a “phenomenal” iPhone launch next week in his first remarks to employees as their new leader.
From a technical perspective, prices are trading below the 9 and 21 EMA on the daily chart, increasing the bearish bias in the index. Daily RSI is now near 27, indicating further declining strength in pricing. On the 4-hour chart, immediate support is at yesterday’s low of 7611. Below this, the next support is at 7,581. Immediate resistance is at yesterday’s high of 7,663, followed by 7,696.
US Dollar Index
The dollar index holds firm near 99.77, sitting close to its highest level in 19 days, as renewed US-Iran hostilities in the Strait of Hormuz push oil prices and safe-haven demand higher. Brent crude has climbed above $95, and rising Treasury yields — with the 10-year near 4.80%, its firmest since November 2023 — continue to underpin the greenback. Markets are now pricing a 68% chance of a September Fed hike, up sharply from around 40% a week ago, following Warsh’s hawkish Jackson Hole tone and further reinforced by Fed Governor Michael Barr’s comments that rate hikes may be needed if inflation doesn’t cool. Weak JOLTS and ISM manufacturing data have done little to dent this repricing so far, with focus now shifting to Friday’s payrolls and next week’s CPI print.
The index is consolidating in a range between 99.408 support and 99.670–99.995 resistance, holding above its rising trendline from last week’s lows. With fundamentals still tilted toward dollar strength on safe-haven and rate-hike flows, a buy-on-dips approach toward support is favoured within the range. A break above 99.995 would open the way toward 100.65–101.09, while a close below 99.408 would shift the bias back toward 99.208.
EUR/USD trades near 1.1574, extending its slide from the 1.1620 area and holding within a descending channel formed since Monday’s high. With the dollar side supported by safe-haven and rate-hike flows, a sell-on-rise approach toward channel resistance is favoured. Resistance sits at 1.1594, followed by 1.1620; a rejection here keeps the bias tilted toward a retest of 1.1570, then 1.1540. Only a break and close above 1.1620 would invalidate the bearish range structure.
Crude Oil
Oil prices are trading flat in the ongoing session after a sharp move yesterday that pushed WTI and Brent up 5%. WTI is hovering around $91.2, with Brent around $97.6 as the geopolitical risk premium remains elevated. The bias remains bullish.
The US conducted a second day of strikes on Iran, with President Trump threatening more attacks if Tehran responded. Within hours, Iran retaliated against American forces. The transit risk from the Strait of Hormuz is high, with scope for more disruption. Oil remains supportive, pricing the disruption as a risk premium with the futures curve in rising backwardation. Looking at options, implied volatility in WTI crude has also climbed in the past few days. Volatility skew shows demand building for out-of-the-money call options. Moreover, money managers were cutting bullish oil positions last week, leaving room for exposure to rebuild as market anxiety rises.
Technically, WTI is finding primary support at $88.80, while $87.50, the 38.2% Fibonacci retracement from the April highs, provides secondary support. A pullback into the $88-$89 zone could offer a long entry, with initial resistance at $93.48, where the 50% Fibonacci retracement converges, as the first target.
Alternatively, a sustained break above $93.50 could trigger a momentum setup, opening the way toward $94.50, the next resistance and potential take-profit level.
Gold and Silver
Gold fell for the fourth session in a row, with spot prices down 0.2% to $4,320, their lowest level since early July. The decline has been exacerbated after bullion broke beneath its 200-day moving average near $4,518.
The US-Iran tensions and worries about the effects on commercial shipping in the Strait of Hormuz are pressuring the precious metal, as investors are focusing on the inflationary effects of higher oil prices and the potential for rate hikes, sending the US 10-year yield above 4.81%, its highest since October 2023, and pushing the US dollar to a two-week high. According to the CME watch tool, markets are pricing in a 70.2% probability of a Fed tightening in September. This makes key upcoming US labour market data, in particular ADP payrolls and Friday’s employment figures, critical for short-term direction.
Meanwhile, investor demand is fading as ETF inflows have failed to reappear to defend the market during this recent decline, and macro conditions no longer provide the favourable backdrop that supported gold in recent weeks. Bulls have plenty of ammunition in the longer-term, supported by continued central-bank buying, but in the short term, the bias is negative as higher yields, a stronger dollar, diminishing ETF buying, and a higher probability of Fed tightening trump safe-haven demand.
Gold remains bearish on the 4-hour chart, with negative momentum and a lower-high/lower-low structure. Gold is likely to bounce off oversold territory, but sellers remain in control below $4,444, and the bias is for the next move to test $4,252 and $4,205.
Silver is also bearish, and more so than gold, with sellers still in control. As long as price stays below $66.04, the risk remains for a move toward $62.83 which is at the 200-period SMA and possibly $62.00, while any recovery is likely to be corrective unless resistance is re-claimed.
