US Markets
US equity markets witnessed yet another day of weakness with the SPX index falling 1.65% and the NDX index dipping 2.29% by closing on Wednesday. The Asian session on Thursday is seeing some support for both indices, with the SPX trading 0.57% higher and the NDX trading 0.98% higher. With this, the indices are now about 4.25% and 6.60% lower than their all-time highs achieved earlier in the month.
Markets were focused on fresh military escalations in the Middle East after the US confirmed its self-defence strikes against Iran, hitting an already fragile ceasefire agreement. The US indicated that its operations were complete, providing some relief to markets this morning. Yesterday also saw the release of the US CPI report, coming in line with expectations at 4.2% YoY growth, marking the highest increase in almost 3 years. However, Core CPI grew only 0.2% MoM, below the 0.3% expected, indicating tamer inflation. This did little to alter the rate-hold narrative ahead of the next Fed meeting, while the odds of a 25-bps rate hike by the end of the year now sit at 43.2%, according to the CME FedWatch Tool. Moreover, Oracle shares were under pressure in post-market trading, falling more than 10% after a stronger-than-expected earnings print was overshadowed by the company’s plan to raise another $40 billion in fiscal 2027 and softer revenue guidance.
From a technical standpoint, although short-term weakness may be seen, markets remain relatively supported by their 50-day EMA levels. The SPX index is rising after taking support near its 50-day EMA at the $7276 level, while the NDX is bouncing exactly after touching the same moving average at $28,236. Moreover, on the 4-hour charts, the SPX index is showing a clear bullish RSI divergence touching the price lows from 5th, 8th, 9th, and 11th June. The SPX index can regain upside momentum if it breaks above the 21- and 200-EMAs on the 4-hour chart near the $7370 mark.
US Dollar Index
DXY locked in modest gains yesterday as the inflation ticked up in May. In the ongoing session, it is trading steadily around 99.96. DXY’s price action has been muted this week; however, recurring US-Iran clashes and the US rate outlook help to retain the moderately bullish bias.
The May CPI data on Wednesday showed the US inflation increased 4.2% YoY vs 3.8% in April (0.5% MoM vs 0.6% MoM). The core inflation came in at 2.9% YoY vs 2.8% YoY in April. The month-over-month figures showed slight relief as the one-time increase in housing rental costs was limited only to April (Core CPI MoM: 0.2% in May vs 0.4% in April). This eased the upside pressure on treasury yields and capped DXY’s gain. Still, investors are wary of rate-hike bets, which now show a 67.9% probability of a 25 bps hike at the December 2026 Fed meeting. The US began a fresh round of strikes overnight in Iran as President Trump vowed even more attacks if no peace deal is secured. The latest escalation kept markets jittery, pushing oil prices higher and keeping treasury yields elevated. This provides a floor for the DXY. The euro increased to 1.155 as the spotlight turns to the ECB’s policy meeting later in the day. The central bank looks poised to raise rates by 25 bps to tackle inflation. However, its upside will be capped as it trades within a descending channel formed since mid-April. Meanwhile, the Japanese yen is trading at around 160.56 per dollar, prompting concerns about potential official intervention by Tokyo.
Technically, DXY continues to trend higher within an ascending channel, with initial resistance at Monday’s high of $100.20, followed by the March high near $100.40. On the downside, initial support could be around the 50-period EMA at $99.67 (4-hr chart), followed by the 100-period EMA at $99.40. The EUR/USD pair is trading around 1.154; the initial resistance appears at the 50-period EMA of 1.157 (4-hr chart). On the flip side, support is likely at 1.150.
Crude Oil
The US and Iran have exchanged strikes across the Middle East since yesterday, causing a further strain on an already shaky ceasefire. As a result, oil prices saw a surge this morning. Currently, Brent is trading at $93.44 per barrel up by around 1.6%, while WTI saw a 0.93% increase and the price is currently at $91.65 per barrel.
The developments in the last two days started after President Donald Trump suggested that negotiations with Iran were taking too long, and the US would “hit hard” if Tehran took too long to make a deal. The statement was followed by further military retaliation in Iran and a new round of strikes between Iran and the US.
A key driver in oil prices rising is in response to Iran’s military announcing the closure of the Strait of Hormuz to maritime traffic, including oil tankers and commercial ships, while warning ships passing through would be under threat. Separately Trump had also said the US has been protecting oil shipments through the Strait, claiming that more than 100 million barrels of crude had passed under US military surveillance.
From a fundamental perspective, oil markets are shifting their focus from supply disruptions towards regional of normalization in through Gulf energy flows. Looking ahead, traders will as expected be closely monitoring any developments surrounding Iran-US diplomatic discussions. However, they will also be focused on next week’s economic data releases from the US and China for further clues on global demand prospects. While geopolitical headlines are crucial, economic growth expectations and demand forecasts will have an significant effect on oil prices.
Technically, Brent remains above its 9-Day SMA near $93.22, suggesting that the broader near-term trend remains constructive despite today’s pullback. Immediate support is seen around $91 while resistance is located near $95. A sustained break above this level could bring the $98.00 region into focus. WTI continues to hold above its 9-Day SMA near $88.62, with support around $87 and resistance near $89. A break above resistance could open the path toward the $100 area in the sessions ahead.
Gold & Silver
Gold increased by 0.50% to $4,090, while Silver increased by 1%, reaching $64.
Gold steadied near $4,090 an ounce on Thursday, hovering just above a multi-month low as investors weighed escalating tensions in the Middle East against a hawkish repricing of the Fed’s path.
The US recent strikes on Iran and President Trump’s comments that Iran would pay a price for stalling negotiations are a big setback for the prospects of a wider diplomatic solution. Prolonged disruption to energy flows via the Strait of Hormuz continues to fuel inflationary fears. While May CPI accelerated to 4.2% y/y, the highest read since April 2023, mainly due to energy costs. Markets are still betting on a hike by December, with Kevin Warsh’s first FOMC on June 16–17 in sight.
Gold is currently trading below its 200-day moving average after falling more than 26% from its January high of $5,589. The fall is primarily the result of higher real yields and widespread cross-asset deleveraging; meanwhile, central banks added a net 244 tonnes in Q1 and have continued to add in Q2, with China extending its purchasing streak, which could continue to support the long-term bullish view.
With key Fibonacci retracements looming and momentum yet weak, bullion looks at risk of another test of the $4,000 handle.
On the chart, buying has emerged on intraday moves lower, though momentum remains capped below $4,120–$4,140, and a test of $4,000 is likely on a breakdown.
Silver paints a similar picture, as it continues to trade within a steep descending channel after topping out in the middle of May. The wick towards $61.50 is indicative of demand, but the lack of follow-through so far suggests that rallies into $65.50 will likely be sold into, pushing toward $60.00.
