Oil Retreats as Fed Rate Bets Ease, but Bond Yields Keep Markets on Edge – Comments from Century Financial

U.S Markets
The S&P 500 trades near $7,693, holding steady after slipping 0.2% Tuesday as US consumer confidence hit a 12-year low, while the tech-heavy Nasdaq 100 outperformed, up 0.2% to $30,412. Oil sold off sharply, logging its largest one-day decline in over a week on news that Saudi Arabia is restoring flows along its East-West pipeline, easing some Middle East supply concerns and lifting risk sentiment. Energy stocks led declines on the pullback, while utilities outperformed as data-centre demand keeps the sector in focus. The 10-year Treasury yield held steady near 5.23–5.25%, with shorter-dated bonds holding onto gains from dovish comments by the Fed’s Williams, though the 30-year is now eyeing the 6% level, a threshold that could pose a bigger test for equities as long-term borrowing costs sit at multi-decade highs.

Focus now shifts to the start of earnings season, with Micron’s results today offering an early read on the AI trade after its shares have surged more than 270% this year, leaving little room for disappointment. Strong results from Corporate America remain critical to reassure markets that profit growth can offset elevated yields, reinforcing the broader shift toward higher equity allocations. Historically favourable October–November seasonality also offers some support, provided the rise in yields stays orderly.

On the technical side, the S&P 500 is testing resistance at $7,700, with last week’s high capping upside near $7,756. Support holds at $7,659, then $7,588. A break above the $7,756 would confirm a bullish shift toward fresh highs, while a failure here keeps the index range-bound between $7,659–7,756.

The Nasdaq 100 is testing resistance at $30,412–30,712, holding above a rising trendline from the late-September low. A break above $30,712 would open the way toward new highs, while support lies at $30,371, then the trendline itself near $30,200. The bias stays constructive while price holds above the rising trendline, with today’s Micron earnings a key catalyst for direction.

Crude Oil
Oil continues its down move today after Brent fell 3% on Tuesday, while WTI fell 4.8% in the same session. Crude oil flows from the Middle East are returning toward pre-war levels despite continued risks to shipping. Shipments of crude oil have rebounded to 17.5 million barrels a day, or 98% of pre-war levels, while flows of products such as diesel and gasoline were at 3 million barrels a day, or 58%. The overall figure was 89% of 2025 levels, measured by the 10-day average over the past five days.

The global oil markets are focusing on the volumes of oil and products coming out of the region as the conflict continues for the eighth month. In addition to shipments going via the Strait of Hormuz, Saudi Arabia has managed to restore about half the flows on its East-West pipeline as well. Further, oil exports from the Persian Gulf have recovered to 23.3 million barrels a day over the last week which is in line with the 2025 average. It is estimated that the global oil market is roughly balanced in September.

Despite the uptick in cargoes, global crude benchmark Brent remains on course for a third monthly gain, of about 14%, in September. Crude prices remain relatively well-supported and an escalation in the war remains the key risk.

From a technical perspective, WTI and Brent are both trading below the 9 and the 21 EMA. Further, daily RSI is muted near 30. Today, Oil presents a bearish bias.

On the 4-hour chart, the current $93 level remains a strong resistance. Next key level for WTI would be near $95. Immediate support is at $89. A break below this level can push prices below the upward trendline to $87.

For Brent, upside remains strong above the $102 level. Next target level can be seen around $104. On the downside, support is seen at $97.

US Dollar Index
The U.S. Dollar Index (DXY) continued its rise on Tuesday, closing 0.20% higher. EUR/USD fell 0.26% as a result. DXY is erasing yesterday’s gain today, down 0.15% in the Asian session, while EUR/USD is up 0.12%.

The dollar is easing after reaching a two-month high, as softer-than-anticipated macro data and Fed speeches lowered odds of interest rate hikes. JOLTS Job openings fell to 7.08 million in August, below the 7.23 million forecast. The CB consumer confidence index also fell more than anticipated to 81.9 in September from 88.6 in August, while New York Fed President John Williams suggested the Fed shouldn’t rush to raise rates further. This led the odds of an immediate rate hike in October to fall sharply from about 71% to 47.1% in a day, contributing to weakness in the US dollar today. However, market participants will be closely watching today’s core PCE Price Index, which could have significant implications for the dollar’s short-term direction before another impactful data point on Friday, when Nonfarm Payrolls is priced in.

Technically, on the daily chart, the dollar index failed to close above the recent high of 101.40 set on 24th September, even as prices seem to be retesting a breakout from a bull-flag pattern on the 4-hour chart. The 21-EMA on the 4-hour is still being held above the 101.20 level, suggesting near-term demand. However, as pointed out yesterday, RSI on the daily and 4-hour charts suggested caution/consolidation, as it was suggesting overbought conditions. Meanwhile, EUR/USD seems to be near support around the 1.1324 level from the 24th June lows, with daily RSI indicating oversold conditions.

Gold and Silver
Gold rebounded from its upward-sloping trendline support by 1.6% yesterday and is currently holding steady around $4,180. Yesterday’s gain was supported by a dip in oil prices as Middle Eastern crude exports have been restored to about 80% of pre-war levels.

While inflation concerns and the prospect of further tightening of interest rates remains a risk, a glimmer of hope has emerged after New York Fed President John Williams indicated that one upward adjustment to interest rates may be adequate late this year. This is relatively modest compared to other Fed officials who have struck a more hawkish tone.

As a result, investors dialled back the probability of an October rate hike to nearly 50% as compared to prior estimates of 70%. A key risk to gold’s bounce is the rise in the yield on the 30-year U.S. Treasury bond past 5.61% this morning to the highest level since 2002. That said, gold’s near-term trajectory hinges heavily on economic data points like Wednesday’s Core PCE Price reading and Friday’s NFP data. On the 4-hour chart, the 5-period RSI is at 67.30, not yet overbought, but gradually veering into that territory. As a result, gold could re-test its upward sloping trendline support around $4,120 before rebounding further.

A trend-based Fibonacci extension connecting the late-Jan peak to the late-June low to the late-August high indicated the presence of 38.2% retracement support not too far below the trendline support at $4,065. Initial resistance could be encountered at $4,246, marked by the mid-to-late-September lows. Any break above this level could potentially pave the way for a leg up to $4,300.

Silver rose 1.41% in yesterday’s session and is currently holding steady at $61.20. It has found a near-term floor around $60.30 over the past three sessions. Latest statistics show gold and silver remain closely linked at the macro level, with their 30-day rolling correlation around 0.94, while the quarterly range in the gold/silver ratio has narrowed to roughly 7 points versus a 10-year average of around 18. However, their technical setups are beginning to diverge.

Gold has so far rebounded from its rising trendline support, while silver has broken below its equivalent trendline and the key $62 support area. At around $61.30, silver is also below its 50-period EMA at $63.18 and 200-period EMA at $64.42 on the four-hour chart, keeping the near-term structure bearish. A recovery above $62 would be an initial positive signal, with $63–$64.5 the more important resistance zone to reclaim. On the downside, failure to recover $62 leaves $60 as the immediate psychological support, followed by the previous consolidation zone around $58 and, more importantly, $55–$56 – which marks the late-July lows.