Asian Pacific indices end lower

US stock indices ended Tuesday’s session mixed. The Dow outperformed, closing up 0.5%, thanks to solid earnings from constituents Coca-Cola and 3M. Elsewhere, there was some weakness across technology stocks. The S&P 500 finished the day flat, while the NASDAQ lost 0.2%.

Source: TN Trader

The small-cap Russell fell 0.5%, giving back more of Monday’s gains. Despite the uneven close, sentiment remains largely positive following another clutch of decent earnings. Countering this, Netflix announced weaker-than-expected results after last night’s close, sending the stock down 7%.

Stocks across the tech sector drifted lower in early trade, although Alphabet bucked the trend and was up over 1% this morning. As for the ‘Magnificent Seven’, Tesla was a touch firmer after hours, as traders prepare for its own earnings release after tonight’s close.

US stock index futures were mixed in early trade on Wednesday, but with a slight downward bias. Investors had to consider yesterday’s comments from President Trump about his meeting with Chinese President Xi Jinping in South Korea, saying “maybe it won’t happen”.

This injected uncertainty into trade expectations and followed on from news that another meeting between President Trump and Russia’s Putin about ending the war in Ukraine has been postponed, if not cancelled. But despite these geopolitical shenanigans, investors remain cautiously optimistic overall, taking solace from a strong start to the third quarter earnings season.

However, given that so much of the market’s gains are down to high expectations over the future profitability of artificial intelligence (AI), next week’s numbers and guidance from heavyweights Apple, Amazon, Alphabet, Meta Platforms and Microsoft could be a major influence over where equities go for the rest of this year.

Market participants are also eyeing the next Federal Reserve monetary policy meeting at the end of this month, where the odds strongly favour a 25-basis point rate cut. This Friday’s CPI release will help shape expectations for that decision and for a potential follow-up move in December. But the government shutdown, which is now in its fourth week, means that the central bank is missing some vital data releases, with Non-Farm Payrolls arguably the key one.

European stock indices were lower across the board on Wednesday. Earnings reports from major companies helped set the tone. L’Oreal dropped 6% on news that US sales were down as tariffs impacted. But there was also some positive news. Italy’s UniCredit delivered stronger-than-expected earnings.

Heineken, the Dutch brewing giant, warned that it expects beer sales to decline in the fourth quarter. Despite this, the stock was firmer first thing. German software giant, SAP, reports after the close.

Investors were also considering the broader geopolitical backdrop, as reports indicated talks between US President Trump and Russian President Putin in Hungary had been postponed. The delay tempered optimism about a potential Ukraine peace framework, contributing to the cautious tone across European markets.

Later on Tuesday, President Trump also cast some doubt over whether his planned meeting with China’s President Xi Jinping ahead of his tariff deadline would go ahead, saying “maybe it won’t happen”.

The UK’s FTSE 100 bucked the weaker trend across Europe. Equities got a lift following the latest inflation update. Headline CPI came in comfortably below the 4.0% anticipated. CPI has held steady at 3.8% for three months now, leading analysts to suggest that it may have peaked.

Source: TN Trader

The better-than-expected update has led traders to reassess the probabilities for rate cuts from the Bank of England this year and beyond. The probability of a 25-basis point cut in December rose to 75% from 46%, with more cuts likely next year as well.

The Bank of England is expected to keep rates on hold at its next meeting in November as it will want to digest the contents of Rachel Reeves’ budget. Also helping to lift the FTSE was a 4.5% rally in Barclays. The banking giant raised its outlook for the rest of the year and announced a £500 million share buyback.

Gold began the week with a sharp rally, which took prices to fresh record highs. Monday’s move saw gold make back all its losses from Friday when it suffered a rare, but overdue, pullback. But prices plunged again yesterday in a move which saw gold drop close to $300 (6.8%) from high to low.

Gold fell again overnight, coming within a few dollars of $4,000 per ounce, its first significant area of support. This has held so far, and gold has bounced off these lows as dip buyers came in. But it’s difficult to know if gold can recover from here, or if there’s more downside to come.

From yesterday’s high to this morning’s low, gold lost over 8%. That’s a savage move. But it doesn’t even represent a correction, which is typically defined as a 10% move. Given gold’s gains, particularly in this year’s record-breaking rally, perhaps investors should expect further downside to come. 

That’s not to say there won’t be sharp rallies along the way, but the daily MACD is still very extended to the upside. Despite this, investor appetite for gold seems strong, and any pullback could be seen as a golden opportunity for fresh buying. It’s quite the conundrum.

Source: TN Trader

It has been a similar story for silver. But in its role as gold’s unruly sibling, silver’s sell-off was sharper. Silver hit an all-time intra-day high of $54.60 last Thursday. Since then, it has plunged, trading down to a low of $47.50 in overnight trade. That represents an overall decline of 13%, suggesting that it has ‘corrected’ according to the standard definition.

Yet it may still be too early to say that the selloff has completed. While the daily MACD has turned down sharply, it remains in overbought territory. That could mean that prices have further to fall. But the MACD could also reset at lower levels and thereby set up a base from which silver can rally further, simply by consolidating around current levels.

Source: TN Trader

It’s also worth noting that within this decline, and as with gold, there have been some sharp rallies. Overall, market participants appear divided between those viewing the recent dip as a buying opportunity and others cautious about further downside. Both precious metals remain prone to violent moves in both directions as sentiment switches back and forth.

Crude oil was up again in early trade, building on yesterday’s rally. Prices got a lift following confirmation from the US Department of Energy that it would purchase one million barrels for delivery to the Strategic Petroleum Reserve, a move made possible by recent lower prices. The advance was also helped along after the latest weekly update from the American Petroleum Institute (API) showed a decline in US inventories.

Taken together, this was just the kind of catalyst needed to trigger a wave of short covering. On Monday, front-month WTI fell to its lowest level since early May. But while it looked as if WTI was on track to retest the double-bottom low of $55 from April and May, it found some support at $56 instead.

Source: TN Trader

Geopolitical issues also played their part, with the cancellation/postponement of a meeting between Presidents Trump and Putin quashing any hopes of a quick end to the war between Russia and Ukraine.

This suggests that Ukraine will continue to pummel Russia’s energy infrastructure, while the Trump administration continues to put pressure on India and tries to persuade China to stop buying Russian oil. Overall, though, even with this uptick in oil prices, trading remains cautious as participants balance technical considerations against broader demand concerns.

The market remains well supplied with oil, while global demand growth continues to slow. The question is, where is the equilibrium point for prices, and that is what the market seeks out each trading day.

Natural gas prices have pulled back a touch following a strong rally which began last Friday. The market’s flat tone suggests some consolidation after the sharp move higher driven by forecasts of colder weather.

Despite the quiet start, gas markets remained alert to potential shifts in weather patterns that could influence short-term demand. For now, the pause looks more like a breather within the broader upward trend rather than the start of a correction, as traders await further cues from temperature models and regional demand updates.

Cryptocurrency markets turned lower after early strength, with Bitcoin slipping back to retest support around $108,000. Ether followed a similar trajectory, retesting support, previously resistance, around $3,800 to $3,900.

This morning’s reversal reflected fading risk appetite as global stock markets showed signs of hesitation. The pullback underscored how quickly sentiment can shift in the space when confidence weakens across risk assets. Traders appeared to be paring exposure rather than exiting completely, resulting in moderate but broad-based losses across the crypto complex.

The VIX was little changed this morning, indicating that investors remain sanguine despite some lingering unease. Risk assets appear to be settling into a holding pattern as investors await key catalysts, particularly Friday’s CPI print, the third quarter earnings season, the Trump administration’s ongoing trade war, and the US government shutdown, now in its fourth week.

This subdued backdrop gives the impression of calm, yet the tone remains watchful. Volatility could return quickly on even minor surprises, especially given the reduced data flow during the shutdown. For the moment, however, the market appeared comfortable maintaining its current stance, with a sense that larger moves would likely come only after the next major data release or policy signal.

The Dow’s record high and the VIX’s subdued volatility reading point to market stability, though it may prove temporary. Beneath the surface, investors are weighing mixed earnings. Netflix’s weaker report has introduced some hesitation in the tech space, while attention now turns to Tesla and IBM for direction.

In commodities, gold and silver are trading in wide ranges as traders assess whether the recent dips represent an opportunity or a warning. Meanwhile, equity sentiment remains constructive, as dip-buying continues to dominate.