The SPX Index is down 0.30% today and is currently trading at $7,775.
From a fundamental standpoint, the SPX Index slid in the early session after a report surfaced that President Donald Trump could order strikes on Iran before the midterm elections. That pulled the timeline forward from a report last week suggesting the US was looking at strikes by the end of November, and it adds to ongoing unease about any potential resolution to the conflict in the Middle East. However, the Treasury yields were little changed on the report. Looking ahead, Initial Jobless Claims data is expected to draw attention.
From a technical standpoint, the SPX Index is retesting its breakout at the $7,770-$7,780 price mark, supporting a bullish standpoint for the day. Furthermore, it must be noted that this level coincides with the retest of the trendline resistance break as well. The trendline connects the highs of $7,817 on 13th August 2026, $7,783 on 21st September 2026, and $7,780 on 23rd September 2026. On the hourly chart, a bullish divergence is also visible.
Crude Oil
Brent is up 2.74% at $106.96 while WTI is up 2.72% at $93.25 following reports that the White House instructed the Pentagon to prepare potential strike options against Iran ahead of the US midterm elections. The scale of such an operation and whether it will take place remains uncertain but is adding to the geopolitical risk premium in the markets. Moreover, a tanker was attacked, marking the first such incident deeper within the Persian Gulf in around a month, according to UK Maritime Trade Operations. Aside from geopolitical tensions, Gulf of Mexico producers shut in more than 510,000 bpd of crude output, equivalent to roughly a quarter of regional supply, as an approaching tropical storm intensified into a hurricane. These factors, alongside yesterday’s technical setup, have lent a leg up to oil prices. Additionally, the EIA cut its global oil demand outlook for every quarter of 2026 and 2027. Average 2026 demand is now forecast to be 2.4 mbpd below its start-of-year estimate and nearly 2 mbpd below 2025 consumption. The 2027 outlook saw even larger cuts as persistently high prices are expected to delay recovery. Signs of demand weakness are also emerging across major markets. China’s recovery is showing signs of faltering; French diesel and gasoline consumption fell YoY in August, and Spain recorded its weakest August road-diesel sales in over two decades. India remains a bright spot, with September oil-product consumption up 3.4% YoY as gasoline and diesel demand increased. Traders will keep an eye on OPEC and the IEA’s updated outlook next week.
Oil has broken out of its downward-sloping trendline resistance. WTI, which is trading at $93.25, could first test $94, which marks the 61.8% retracement level on a trend-based Fibonacci extension connecting the late September low to the early October high to the recent low, and aligns with the 100-EMA on the 4-hour chart. The next potential target could be $96.30. Brent, which is trading at $106.96, could potentially rally to between $107.78 and $108.20, a zone that could become its first target. It has support at $104.85. A break above resistance could pave the way for a move up to $110.
Gold and Silver
Precious metals continue to face resistance from a stronger dollar and higher yields. Gold is trading below $4,140, while silver is below $60. Oil prices are higher in the ongoing session amid geopolitical volatility, raising inflation concerns. Today’s bias remains mildly bearish.
Gold broke below $4,100 yesterday before recovering later and closing above this level. Moves in the dollar and Treasury yields are capping gold bulls. The 10-year yield touched its highest level since 2002 yesterday, at 5.365%, and its negative correlation with gold has recently increased due to fiscal concerns. This caps any upside in gold, especially with September CPI due next week. Additionally, minutes from the last US Federal Reserve meeting showed that all 19 policymakers backed the September hike decision, and most expected another would be appropriate by year-end. Investors are now pricing in roughly a 20% chance of an increase at the Fed’s next meeting in late October but an 80% probability in December. On a relief note, ETF flows have been positive despite the price action, even as precious metals fell in late September. Exchange-traded funds added 120,300 troy ounces of gold to their holdings yesterday, higher than the previous session’s 81,000-ounce addition, bringing this year’s net purchases to 2.31 million ounces, according to data compiled by Bloomberg. This was the fourth straight day of growth. Central bank buying also provides support, especially from China.
Technically, $4,060-$4,100 is a crucial support zone for gold. This level also sees confluence with an ascending trendline from June lows. Secondary support sits around $4,030. On the upside, resistance is likely around $4,150, near yesterday’s high, followed by the $4,180-$4,200 zone. Target short entries on failure and pullback from $4,150, with $4,100 as the initial support and TP level.
For Silver, the $58.3-$58.5 level acts as crucial support, while $60.5-$61 acts as initial resistance, followed by $62. Target short entries on failure and pullback from $61, with $58.5 as the initial support and TP level.
U.S. Dollar Index
The US Dollar Index gained 0.40% in the previous session and is currently trading 0.06% higher at 102.31, remaining close to its recent 18-month high. The dollar continues to find support from elevated US Treasury yields and expectations of further Federal Reserve tightening.
The latest September FOMC minutes showed that most policymakers expect another rate increase this year, with inflation risks remaining a key concern. Policymakers highlighted persistent inflation pressures from strong AI-related investment, improved corporate pricing power, higher inflation expectations and continued demand for skilled labour. While tighter financial conditions could delay the next move, markets continue to see December as a potential timing for another hike. Meanwhile, rising oil prices amid continued Middle East tensions could add further pressure to inflation expectations, keeping US yields elevated and supporting the dollar.
Technically, on the 4-hour chart, the DXY continues to trade within a rising parallel channel, maintaining its broader bullish structure. Immediate support is at 101.885, the previous session’s low, followed by the 20-day EMA at 101.17. On the upside, immediate resistance is at 102.49, the previous session’s high, followed by 103.25. For EUR/USD, immediate support is at 1.1164, the previous session’s low, while resistance is at 1.1262, the previous session’s high.
