U.S. markets fell by 0.39% yesterday and are attempting a modest rebound in today’s session, as oil prices eased overnight. SPX is trading around $6,400 (+0.95%), and futures are also pointing higher (+0.75%). The move follows reports that President Trump may be willing to end military operations in the Middle East even if the Strait of Hormuz remains partially closed, offering short-term relief to risk sentiment.
Brent and WTI Crude, which had surged earlier on renewed geopolitical tensions, reversed course and declined by 1.3% and 1.9% respectively, in overnight trading. This pullback has provided temporary support to equities, reinforcing the close tie between markets and energy prices. However, the underlying supply disruptions remain unresolved, suggesting that any sustained decline in crude may be limited.
The S&P 500 marked its fourth straight decline on Monday, while the Nasdaq underperformed amid continued weakness in technology stocks, particularly semiconductors, with big names like Nvidia down 1.4% and Micron down 10%. Notably, index-level declines were heavily influenced by mega-cap names, while broader market breadth showed early signs of stabilisation, with several sectors, including healthcare, financials and basic materials, trading higher.
From a macro perspective, sentiment is still fragile. While easing escalation risks is supportive in the near term, the longer-term outlook remains challenging. Prolonged energy disruptions are likely to weigh on global growth and earnings expectations, reinforcing stagflation concerns. Moreover, markets have repeatedly reversed on shifting geopolitical headlines, making the current rebound vulnerable.
Technically, resistance for SPX may be found at the 9-day SMA level of $6,500, while $6,250 – $6,280 remains a critical support zone. While short-term optimism is fueling some rallies, the overall outlook is still cautious. Oil prices, geopolitical uncertainty, and growth risks are limiting gains and could push equities lower.
Crude Oil
Oil has pared some of its gains in today’s session following reports that Trump plans to end US military operations in Iran, even if the Strait of Hormuz remains closed. WTI is down 2% at $104.2, and Brent is down 1.4% at $110 in the present session. As a result, the Brent-WTI spread has also narrowed slightly from yesterday, trading at $6. In his recent comments, Trump also emphasised that pushing to reopen the Strait would lead to the war extending beyond his timeline of four to six weeks. The closure of Hormuz remains bullish for oil. Moreover, we often observe this pattern in which the US president oscillates between claiming the war’s end is imminent and cautioning against increased military efforts. Hence, investors also remain on edge, tracking the buildup of US troops in the region and a possible ground deployment in Iran. These uncertainties regarding the oil supply have led to oil gaining nearly 50% in March, also sparking concerns about rising inflation worldwide. Further, according to an energy market consultancy, if the strait remains closed for the next six to eight weeks, oil could also surge to $150. This comes as almost 100 million barrels of oil don’t go through the strait each week, so over time, the lack of supply eventually drives prices.
Technically, WTI is trading at $104.2, well above the 9- and 21-day SMAs of $97.3 and $92.6, respectively. It is retesting the breakout from the $86-$102 range in today’s session. If it continues, we can see the recent highs of $110 and $120 coming into picture. Otherwise, it may find support at the $102 range low and the 9- and 21-day SMA levels.
Technically, Brent is trading at $110, well above the 9 and 21-day SMAs of $102.6 and $96.7, respectively. The resistance and support levels for the commodity can be found at $120 and $107.5, respectively.
U.S. Dollar
The US Dollar Index (DXY) is currently trading near the $100.48 level, holding close to its intraday high of $100.643 in today’s Asian session. While the index has paused after a strong five-day rally, the broader trend continues to favour upside with the dollar on track for its strongest monthly performance since July.
The underlying macro backdrop remains constructive for the dollar. Escalating geopolitical tensions in the Middle East have driven a sharp rise in oil prices and heightened recession risks globally, reinforcing the US dollar as a preferred safe-haven asset. This divergence, where commodities surge while risk assets struggle, continues to underpin USD strength. Although some improvement in risk sentiment is seen, following The Wall Street Journal’s report on Monday that US President Donald Trump is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed, suggesting a potential de-escalation in US-Iran tensions. However, the situation remains highly uncertain. Conflicting signals, including warnings of possible US strikes on Iran’s energy infrastructure and Iran’s reluctance to engage in direct negotiations, are highlighting the fragile nature of the current environment.
From a macro perspective, sustained upside risks to crude oil prices keep inflation concerns elevated, which in turn supports a more hawkish outlook for the Federal Reserve. This dynamic would help limit downside in the dollar and reinforces the view that any near-term pullbacks in DXY are likely to be corrective rather than a trend reversal.
On the data front, market participants will focus on key US releases, including JOLTS Job Openings and Consumer Confidence.
In FX, EUR/USD is seeing a mild recovery after a five day decline, trading near 1.1463, with attention shifting to upcoming German retail sales, unemployment data, and Eurozone inflation prints.
Technically, the DXY has immediate support at the $100.206 level (last week’s high), followed by the last session’s low at the $100.050 level. On the upside, immediate resistance is at 100.643 (current session high), followed by the $100.860 level. The EUR/USD has an immediate resistance at the 9 Day SMA at 1.1545 and support at the current month’s low at 1.1411.
Gold and Silver
Precious metals are trading higher in the current session after closing in the green yesterday. Gold is up 1.4% above $4,550, and silver is up 3.3% above $72 on renewed optimism from President Trump’s willingness to bring a swift end to the Iran conflict. The trend and sentiment for the bullion and silver are turning increasingly positive.
The advance came following a report from the Wall Street Journal that Trump told aides he’s willing to end the US military campaign against Iran even if the Strait of Hormuz remains largely closed, raising hopes for an end to the month-long conflict. Meanwhile, Fed Chair Jerome Powell said long-term US inflation expectations appeared to be in check, despite the war-driven spike in oil prices that stoked inflationary pressures and rate-hike bets. The central bank’s policy was “in a good place for us to wait and see,” he said. This comment from the Fed chair eased rate-hike bets and pushed treasury yields lower, giving gold a lift. As gold draws dip buyers, history suggests that signs of capitulation among key players, such as ETFs, often herald gains ahead. Global ETFs have shed gold for four consecutive weeks. Pullbacks this steep or steeper have only been seen a number of times since ETFs were introduced in the early 2000s. And they often have proved to be somewhat of a contrarian indicator: Three-month forward returns have topped 4%, on average, since 2005. The current global outflows in gold ETFs amount to $4.3 billion (week ending March 27th) and a cumulative $12.2 billion (for the month of March). However, downside risks do exist, and upcoming reports on central-bank buying will also be key to understanding the actions of these key players in the market. Silver’s rebound is also based on increasing bets for a quick end to the conflict and decreasing rate-hike bets.
Technically, gold closed above the key $4,500 level yesterday, which is now acting as initial support. The $4,400 mark appears to be the next support level, followed by the 200-day EMA at $4,217. Resistance is likely at the 100-day EMA at $4,610, followed by $4,700. The momentum is steady and slowly rising, with the RSI touching 40. Silver will aim to stay above $70 today, with support likely in the $65-$67 range. Next support is possibly at the 200-day EMA at $62. On the other hand, resistance is likely in the $72-$74 range, which also includes the 100-day EMA.
