US Stocks Quiet Ahead of a Big Week – Dow up 0.25%
The three major US stock indices all closed near flat in trading yesterday as investors looked ahead to key economic data updates and earnings reports later this week. The Dow added 0.28%, the S&P edged 0.06% higher, while the Nasdaq drifted 0.10% lower. There was some more volatility across other financial products; the dollar and Treasury yields took a hit as tariff concerns continued to weigh on sentiment. The DXY fell 0.69% to 98.92, while the 2-year Treasury yield dropped 5.5 basis points to 3.693%, and the 10-year fell 2.7 basis points to 4.208%. Oil prices tanked on demand concerns, with Brent off 1.72% to $66.72 and WTI down 1.76% to $61.91 a barrel, whilst gold found good buying interest to move back towards recent highs, up 0.47% to $3,342.60 an ounce.
Oil to Remain Under Pressure
Oil prices, alongside most financial products, have been volatile over the last few months and particularly over the last few weeks after Trump’s ‘Liberation Day’, and traders are expecting to see volatility remain higher in the medium term even if we see a calming in other products. We have seen a good drop in oil prices in the last few months, and it does feel like forces are aligning to keep ‘black gold’ under pressure in the medium term. Certainly, tariff implementation and further threats have influenced global growth concerns, and oil is always one of the first to take a hit in those circumstances, but it is also under pressure from the supply side, with OPEC+ countries expecting a pickup in production increases in the next few months. We have seen over 30% wiped off the value of WTI since the start of the year, and unless we see some serious changes in overall market sentiment, expect it to remain under pressure for the foreseeable future.
Economic Calendar Picks Up Today
The global economic calendar starts to pick up today and then speeds up over the next few days, culminating in the key Non-Farms data on Friday. The Asian session is set to be fairly quiet today with little on the event calendar, and despite federal election results coming through from Canada in the session, the loonie is expected – and so far, has been – relatively quiet. It is also relatively quiet in the London session today, although euro traders will keep a close eye on Spanish Flash CPI data (exp. +2.0%) early in the day. Things should start to get interesting on the New York open though, with the first of four major US jobs updates due out early in the session in the form of the JOLTS Job Openings data (exp. 7.48mio). This is released alongside the CB Consumer Confidence data (exp. 87.4), with investors expected to monitor both closely for tariff influences.
