U.S. Markets
The S&P 500 ended last week marginally lower after hitting an all-time high of $7,516. On Friday, it fell 1.38% as bond yields around the world rose. The U.S. 30-year Treasury bond yield hit its highest level in around a year.
The inflation data released last week makes the Federal Reserve cutting rates anytime soon a long shot. In April, the US CPI rose 0.6% to 3.8% vs an expectation of 3.7%.
US stock index futures are down today, as the end to the Iran war remains clouded, and concerns rise over a tighter monetary policy to keep inflation in check grip the markets.
Given the situation now, the financial markets expect interest rates to remain higher for longer, despite President Trump’s demands that Kevin Warsh, get rates down. The current macroeconomic backdrop no longer supports an easing bias, let alone a rate cut. According to the Fedwatch tool, there is a 41% chance of a 25 bps rate hike in December, up from 0.5% one month prior.
Tech giant NVIDIA is set to report earnings on Wednesday, along with Target, while Walmart is due to post results on Thursday.
Technically, the index is at the 9 EMA support and trading above the 21 EMA. The 5-period RSI is around 50, indicating some strength in the index. On the 1-hour chart, immediate support is at $7,322, which is the 6th May breakout, followed by the $7,272 level. Immediate resistance is at the $7,424 level, which coincides with a downward trendline connecting 14th and 15th May highs. The next resistance is at $7,453, which is the 14th May breakout area.
Crude Oil
Following last week’s 8% gain in crude oil prices, Brent has now surged past $113.27 for the first time in nearly two weeks, while WTI soared past $107. U.S-Iran tensions continue to simmer, with negotiations for a peace deal reaching a deadlock. The Strait of Hormuz remains shut and President Trump indicated that the clock was ticking for Iran to agree to a 5-point agreement put together by America. An impasse in negotiations is keeping crude oil prices elevated for the third straight session. Oil prices have risen over 50% since the outbreak of the conflict. According to the IEA’s May 2026 Oil Market Report, more than 14 mb/d of Gulf oil remains shut in, with cumulative losses since February surpassing 1 billion barrels — the largest supply disruption on record. Flows through the Strait has collapsed from around 20 mbpd pre-war to just over 2 mbpd, and the market is losing roughly 100 million barrels each week as the closure persists. Net of bypass pipeline reroutes, an estimated 10%–13% of global supply is effectively off the market. Meanwhile, China’s April crude throughput fell to 54.65 million tons — down 11% MoM and 5.8% year-on-year — as state-owned refiners cut utilization to below 67%, a record low since 2021. With the world’s largest crude importer scaling back, the disruption is rippling well beyond the Gulf and reshaping global oil flows.
Brent is up 1.55% at $113.83, with a near-convergence of the 9- and 21-SMAs on the day chart creating a support zone between $109.55 to $110.61. Sustained moves above support could result in a retest of the $120-level, which marks the upper bound of the rectangular trading range ($87 to $120.8) within which oil has been trading since March 2026. WTI is up 1.86% at $107.62. The 9-day and 21-day SMAs have converged to create support at $101, which could propel the commodity to $113.29, marked by the late-April high.
U.S. Dollar Index
Last week, the dollar rose by 1.46% amid ongoing geopolitical tensions and elevated Treasury yields. It is currently trading at $99.214
On a fundamental level, the dollar looks bullish due to a few reasons. Firstly, the US 30 Year yield is currently at 5.14%, a level previously seen in 2025. The dollar is pushing toward its best week in two months as Treasury yields climb, with growing conviction that the Federal Reserve may be forced to tighten after all. Sticky inflation prints and signs of renewed economic momentum are forcing markets to rightfully inch back toward pricing in rate hikes, helping lift the greenback. Moreover, the dollar’s 10-week rolling correlation with US tech stocks has been highly negative over the past couple of months, driven by a weakening greenback and AI-driven equity advances. While correlation does not necessarily imply causation, if we were to see a US stock selloff after the extended rally since the end of March, that would certainly sour market sentiment and lift the dollar from a haven perspective. Lastly, EUR/USD is on the cusp of taking out the intraday low from April 9 at 1.163, which will be a significant signal to FX traders that more US dollar strength is on the cards. Investors expect the European Central Bank will remain cautious on policy tightening. There are enough cautious comments from ECB officials to persuade traders that a rate hike in June is far from certain.
On a technical level, the DXY is trading above its 9-, 21-, and 50-day SMAs. Moreover, it is currently trading on a multi-decade trendline connecting the lows of 2011, 2021, and 2026. On the upside, potential resistance lies at 99.40, a level tested previously in January and March. A break above this level could push the DXY to $100. On the downside, a potential support lies at 98.91.
Gold and Silver
Precious metals are extending declines as a lack of progress in reopening the Strait of Hormuz keeps oil prices, the US dollar and treasury yields elevated. In today’s session, gold is trading near $4,540 after falling 3.7% last week. Silver is down almost 1% at around $75, adding to last week’s decline of almost 6%. The intraday bias for both metals is moderately bearish.
Inflation concerns stemming from higher oil prices are spilling into bond yields. The US 10-year treasury yield hit a 16-month high of 4.63%. At the start of this month, it was 4.38%. The US 30-year treasury yield is also above 5%, continuing its climb. Real yields are also up across key maturities. This leads to a stronger dollar and non-yielding precious metals on the back foot. The negative correlation between DXY and Gold (10-day period) is at its highest level in 2026, at -0.93. Traders will be keeping tabs on the minutes of the US Federal Reserve’s April Meeting this week for clues on the future path for rates. Currently, the probability of a 25 bps rate hike by 2026-end is around 41% according to the CME FedWatch.
Technically, gold is likely to face resistance at the 38.2% Fibonacci retracement (drawn from March highs to lows) around $4,600, followed by the 100-day EMA at $4,650. On the flip side, initial support is likely around today’s low at $4,480, followed by $4,400. For silver, resistance is likely around $78-$79 (confluence of 50-day EMA and 61.8% Fib retracement from 10th March high to 23rd March low), while support could be found around $72 (38.2% Fib retracement).
