Oil Falls 2% on Growth Concerns; Gold and US Stocks Weaken Amid Market Uncertainty – APM Capital Market Report

Commodities

Oil prices saw a sharp reversal yesterday and fell about 2% on worries that slower economic growth in the US and China could reduce demand for energy, especially after prices surged over 7% during the prior three days.

Brent futures fell $1.88, or 2.3%, to settle at $79.55 a barrel, while US West Texas Intermediate (WTI) crude fell $1.89, or 2.4%, to settle at $75.53.

Gold prices fell on Tuesday, weighed down by higher U.S. bond yields, as markets await inflation data that could shed light on the scale of an expected interest rate cut from the Federal Reserve next month.

Spot gold fell 0.2% to $2,512.63 per ounce, having eased from the record high of $2,531.60 hit last week. U.S. gold futures eased 0.3% to $2,547.90.

US market

US shares failed to show much direction yesterday ahead of a much-anticipated quarterly report from Nvidia on Wednesday and economic data expected later in the week that could give clues about the path of interest rate cuts.

Apple shares closed 0.4% higher, while Amazon dipped 1.4%. The S&P 500 climbed 0.16% to end the session at 5,625.80 points.

The Nasdaq gained 0.16% to 17,754.82 points, while the Dow Jones Industrial Average edged higher 0.02% to 41,250.50 points. Treasury 10-year yields rose one basis point to 3.83% and a $69 billion US sale of two-year notes was well-received.

European market

European stocks were mostly higher on Tuesday, as the Stoxx Europe 600 index closed up 0.16% to 518.88.

The German DAX gained 0.35% to 18,681.81, the FTSE 100 index continued its march higher to finish up 0.21% to 8,345.46, although the French CAC 40 index weakened 0.32% to 7,565.78.

Asian market

Asian stocks were mixed on Tuesday with Hong Kong’s Hang Seng adding 0.4% to 17,874.67 whereas the Shanghai Composite index dropped 0.2% to 2,848.73.

Japan’s benchmark Nikkei 225 closed 0.5% higher at 38,288.62. Australia’s S&P/ASX 200 dipped 0.2% to 8,071.20, and South Korea’s Kospi dropped 0.3% to 2,689.15.

Forex

The greenback edged lower after data showed U.S. house prices dipped 0.1% on a month-on-month basis after being unchanged in May. They increased 5.1% in the 12 months through June, the smallest year-on-year rise since July 2023,

Sterling has been one beneficiary of the weakness in the U.S. currency, and on Tuesday GBPUSD hit its highest since March 2022 at $1.3246. It was last up 0.3% at $1.3226.

The euro gained 0.2% versus the dollar to $1.1181, just off Monday’s 13-month top. The Australian dollar rose 0.3% to US$0.6791, not far from a one-month high of $0.6799 hit on Friday. Against the Swiss franc, the dollar fell to its lowest since early January and was last down 0.7% at 0.8414 franc.

Last Updated on 7 months by News Desk 1