US Markets Strike Higher on Rate Cut Hopes – Nasdaq up 0.9%
US stocks pushed higher in trading yesterday as investors shrugged off more tariff updates and threats from the White House, focusing instead on Fed meeting minutes that indicated rate cuts are coming. Nvidia notably hit the $4 trillion mark during trading, helping to lift the Nasdaq by 0.94%. The S&P followed, closing up 0.61%, with the Dow trailing behind but still closing 0.49% to the good. US Treasury yields dipped after the minutes, the 2-year off by 4.8 basis points to 3.843%, and the 10-year down 6.7 basis points to 4.332%. The dollar closed relatively flat against the majors after a choppy trading day, with the DXY up just 0.02% at 97.52. Oil was relatively quiet, remaining steady at recent highs, with Brent up 0.06% to $70.11 and WTI up 0.04% to $68.27, while gold pushed higher into the recent range, up 0.35% to $3,313.24.
Dollar in Focus for FX Traders
Foreign exchange traders are expecting volatility to pick up again in the major currencies as the dust (maybe) starts to settle on US tariff levels for various different countries. The dollar has been on a downward trajectory for much of the year, with the DXY dropping from a high of 110.17 in January to a low of 96.38 earlier this month. Now traders feel that we could be at pivotal levels as markets adjust to a bit more clarity on the global trade issue that has been dominating since President Trump came to office. Data will come under close examination in the coming weeks and months, and if the anticipated inflationary concerns start to rise in the US economy, then we may see the dollar phoenix rise from the ashes in the second half of the year.
Quiet Calendar Day Ahead for Traders
Traders are preparing for a quiet calendar day ahead, with the major focus still likely to be on any geopolitical updates that hit the newswires during the day. The Asian session is likely to start off on the front foot after a strong day on Wall Street yesterday. There is the possibility that we will have the latest Chinese loans data (exp. 1,960 bio) out at some point during the day, which could add some volatility to local markets, but overall traders are expecting most flow to be tariff-driven. There is little on the dance card for the European session; however, the US weekly unemployment claims data (exp. 236k) is due out shortly after the New York open, which could see some moves in US markets. We will also hear from Fed members Christopher Waller and Mary Daly later in the day.
