SPX Index futures are slightly down by 0.25% this morning, whereas Nasdaq futures are up by 0.16%.
Fundamentally, two opposing factors are driving US markets. On one hand, we have strong NFP data that has increased rate-hike prospects; according to the CME FedWatch tool, the chance of a rate hike is 60%. Moreover, Brent is now at $100 due to renewed attacks in the Middle Eastern region. On the other hand, we have developments on the AI front: OpenAI’s GPT-6 and claims that “Artificial General Intelligence has arrived” inject fresh momentum into the AI trade. This is expected to create a bullish tone for AI hardware companies this week. Hence, we may see divergence between the SPX and the Nasdaq.
Technically, the SPX shows a bull flag formation on the daily chart; however, it had a false breakout from its upper level at 7742. A sustained breakout above that level would be bullish for the SPX. Moreover, at 7712 we see support from the 9-day SMA. The RSI is currently at 55, also reflecting conflicting market data. Potential resistance lies at 7742. If the SPX breaks above this level, it will face another at 7803, coinciding with the highs of 12th August. On the lower end, potential support lies at 7712, and a break below this may push the SPX towards its 21-day SMA at 7692.
Technically, for the NDX, it is trading in a consolidation zone between 28,800 and 29,544. The NDX may see potential resistance at the upper level of 29,544. A break above this resistance may lead to bullish momentum, with the next resistance at 29,923. Moreover, it is trading above its 9-, 21-, 50-, 100-, and 200-day SMAs. On the downside, potential support lies at 29,331, which coincides with the 9-day SMA. A break below this level may lead to the next support at 29,234 at the 50-day SMA.
Gold & Silver
Gold is trading near $4,415, extending its recovery as a weaker US dollar improves the appeal of bullion. The softer dollar, alongside renewed investor participation, continues to provide a supportive backdrop, helping gold regain ground after its recent pullback.
Investor demand remains a key pillar of support, with gold ETFs seeing renewed inflows in recent weeks. Central-bank buying has also picked up, with China adding 650,000 ounces to its reserves in August, extending the PBOC’s buying streak to 22 months. Continued official-sector accumulation and portfolio diversification demand should help underpin prices over the medium term.
However, inflation risks from ongoing disruptions to energy supplies through the Strait of Hormuz may limit gains. Brent crude is nearing $100 a barrel, and markets see about a 60% chance of a Fed rate hike as soon as next week. As a result, the upcoming US PPI and CPI data will be important for the short-term outlook on rates and yields.
Technically, gold retains a positive bias above $4,400. A sustained break above $4,435 could open the way toward $4,500, while a pullback toward $4,400 may attract buying interest, followed by $4,350. Overall, the combination of a softer dollar, ETF inflows, and renewed central-bank demand keeps the broader outlook constructive. Silver is trading around $66.25 and remains cautiously bullish too. Support for the metal lies around $65.35, whereas resistance may be seen at $67.60.
Gold prices in the UAE are as follows:
24K: AED 534.75
22K: AED 495.00
21K: AED 474.75
18K: AED 407.00
The dollar index slid 0.26% yesterday and is lower in today’s session, falling below 99 as the yen extends its gains. Expectations of more aggressive monetary tightening by the BOJ and continued carry-trade unwinding weaken a bullish DXY case.
The US dollar has given up most of the gains sparked by the blowout payrolls report, a surprisingly tepid reaction to a beat of this magnitude. The last time jobs came in so hot was back in June, when May payrolls initially jumped 172k, also well above expectations. The dollar climbed 0.6% on the session. That data was later revised much lower, but the point is that the greenback isn’t reacting as it typically would to strong economic data. Given the strange moves in the yen, it’s hard to get a clean read on whether this is driven more by jitters about the BOJ or reluctance that the Fed will indeed find this sufficient evidence to follow up on expected rate hikes. The same hesitation shows up in US rate-hike bets, which are back to about 60% but still nowhere near fully priced in for a move this month. That’s because policymakers have stressed that it’s inflation, not payrolls, which will determine the September FOMC decision on rates. If CPI comes in reasonable, as Fed Gov. Christopher Waller expects, and policymakers use it to justify standing pat on rates, credibility concerns will haunt the dollar.
USD/JPY is being given another little nudge toward the 152 zone with comments from Japan’s Finance Minister Katayama on Tuesday. She isn’t saying anything which will surprise FX traders, but doing so when the dollar-yen is already on a downward trajectory will make a difference. Investors this week are looking for news pegs to justify short-term bullishness on the yen, and Katayama is helping them out.
Technically, DXY broke lower from the channel on the 4-hour chart, forming a bear flag breakdown. It also dropped below the 61.8% Fib retracement at 99.06 drawn from August lows to September highs. The confluence of the 21-period EMA (4-hour chart) at this level strengthens the case for initial resistance today, followed by the 99.21-99.30 zone (confluence of the 50 EMA on the 4-hour chart). Conversely, support is likely around 98.72, followed by 98.56. Unless 99.06 can be recovered, a bullish setup remains weak, as the 2-year and 10-year yields are also at major resistance.
Crude Oil
Crude oil prices were higher on Monday, with WTI prices up by 1.51% and Brent up by 1.30% by the close. Both instruments showed further strength on Tuesday’s Asian session, with WTI trading 1.42% higher and Brent trading 1.20% higher, breaching the $100 mark.
The markets seem to be pricing in a prolonged Middle Eastern conflict following the renewed fighting between the US and Iran. Institutions like Goldman Sachs have modestly raised oil-price estimates for Brent to $85/bbl for Dec 2026 and $80 for 2027, assuming shipping disruptions will persist. Moreover, Chinese oil demand returned, with crude imports rising to 37.9 million tons in August, 6.2% more than in July, as cargoes from the Persian Gulf crept higher and refiners increased purchases from other sources. Flows to the world’s biggest buyer are gradually recovering after initially being crippled by the war in Iran, although they remain 23% below August last year. The rise in crude supply has allowed China to export more oil products, offering relief to a global market struggling with refining bottlenecks and outages caused by the twin shocks of war in both Ukraine and the Middle East.
From a technical perspective, WTI is trading slightly above the $94.49 resistance level from the highs of 23rd July, a sustained close above which could mean further upside, as momentum remains firmly bullish with RSI above 50 but not yet in oversold territory on the daily. With a recent breakout from a downward-sloping trendline connecting the highs of 7th April, 30th April, 18th May, 23rd July and 21st August, WTI’s market structure remains tilted towards the upside. Brent remains in a similar market structure with a potential resistance near 102.29.
