Stocks Mixed in Volatile Markets – Nasdaq down 0.8%
US stock markets were mixed yesterday. The Dow rallied well after bank earnings beat expectations and Jerome Powell made dovish comments with regard to the jobs market; however, negative updates from the White House on Chinese trade pulled the S&P and Nasdaq lower. The Dow added 0.44% on the day to push up to 46,270, while the S&P fell 0.16% to 6,644 and the Nasdaq dropped 0.76% to 22,521. The dollar ultimately fell after a whippy day’s trading, the DXY down 0.23% to 99.04, while Treasury yields finished close to flat, the 2-year losing 2.1 basis points to move to 3.481%, while the benchmark 10-year did close flat at 4.032%. Oil fell again on the increased China–US trade tensions and an IEA warning on oversupply in the coming year, Brent down 1.71% to $62.24 and WTI down 1.33% to $58.70. Gold hit another record level in choppy trading, ultimately closing up 0.79% at $4,142.92 an ounce.
Oil Contracts Looking Weak Again
Oil prices fell again in trading yesterday as the planets started to align for a bigger trend to the downside for ‘black gold’, while its shiny yellow counterpart continues to drive higher to fresh records on a daily basis. Geopolitical concerns continue to raise demand issues for oil, and they do not seem to be receding, while the supply side of the equation also looks to be conspiring to push prices lower. The International Energy Agency warned of a huge oversupply in 2026 as OPEC+ continue to plan for production increases. WTI dipped under $58 in trading yesterday and is now within touching distance of the annual low just above $55, and a break here could open the way for a move into fresh downside ranges, with the next major support levels down near 2020 lows under $40 a barrel.
Geopolitics and Central Banks in Play Again Today
Geopolitical updates continue to dominate market sentiment this week, and traders are again expecting updates from China and the US to dictate moves in the sessions ahead today. However, there are some key data updates out, and we do hear from some senior central bankers, both of which could add further volatility to the mix. The Asian session will have a strong focus on China again today, not just for any further updates on trade issues, but also because we have key CPI (exp. -0.2% y/y) and PPI (exp. -2.3% y/y) data due out midway through the day. There is nothing of note due out in the European session, but focus will again be on Washington, D.C. later in the day, with central bankers gathering there this week. Fed members Miran, Waller, and Schmid are due to speak today, as well as the MPC’s Breedon and RBA Governor Michele Bullock.
