Firmer close across Asian-Pacific stock indices

US stock index futures were little changed on Monday but with a slight downside bias following a week of steady gains.

Source: TN Trader

For the week, the Dow gained 1.7%, while the S&P 500 and Nasdaq Composite added 0.9% and 0.8%, respectively. But it was the small-cap Russell 2000 which outperformed, rallying an impressive 3.1%. Both the S&P 500 and Nasdaq have now posted four positive weeks out of the last five, and gains have been underpinned by optimism that the Federal Reserve could cut rates later this year. 

The CME’s FedWatch Tool suggests an 85% likelihood of a 25-basis point reduction at next month’s meeting. However, some analysts are pondering whether the Fed could cut by as much as 50 basis points, just as it did at the same time last year.

Attention will turn to the Federal Reserve’s Jackson Hole Symposium later this week, with investors keen to interpret any signals from Chair Jerome Powell and his colleagues on the timing and size of potential cuts.

European stock indices drifted lower in early trade on Monday, taking their cue from softer US stock index futures.

Source: TN Trader

European leaders, including Germany’s Friedrich Merz, France’s Emmanuel Macron, and UK Prime Minister Keir Starmer, travel alongside Ukrainian President Volodymyr Zelenskyy to Washington for talks with President Trump.

While expectations for a breakthrough remain low after Friday’s Alaska meeting ended without a ceasefire, investors are keeping a close watch on the outcome of today’s discussions.

Currency markets began the week in muted fashion, with most majors trading within familiar ranges. The US Dollar Index continues to trade below 98.00, keeping the dollar on the defensive. Moves across most G10 currencies were limited, reflecting the lack of significant data releases to start the week.

Source: TN Trader

Gold and silver both saw modest overnight gains. Gold traded either side of $3,350 and continues to consolidate in a range between $3,300 and $3,400. Investors are having to balance fluctuations in geopolitical tensions with upcoming policy signals from the Federal Reserve.

Source: TN Trader

Silver also advanced slightly, contributing to the positive tone. While the move was not dramatic, the uptick reflected a broader appetite for safe-haven assets, even as overall market volatility stayed contained.

Source: TN Trader

Oil prices were relatively steady in early trade this morning. Front-month WTI hovered either side of $62 a barrel and continues to trade at the lower end of its recent range. This underscores the lack of momentum in the market. Traders remain cautious, weighing the outlook for demand amid ongoing geopolitical tensions and trade uncertainty.

Source: TN Trader

Natural gas was down over 3% in early trade on Monday. The decline comes against a backdrop of subdued trading activity elsewhere in commodities. While oil prices remain relatively steady, gas markets have faced sharper selling pressure, leaving prices firmly on the back foot.

Digital assets were the big movers overnight, with cryptocurrencies trading sharply lower compared to more subdued action across equities and FX. Bitcoin continued to pull back away from Thursday’s all-time high, just below $124,500. But Ether came under heavier selling pressure, dropping over 5%. 

These losses highlight the continued volatility within the crypto sector. The bigger question is whether this is simply a round of profit-taking following the sharp rally over the first two weeks of August, or if it is the beginning of a deeper and more protracted sell-off.

Implied volatility ticked higher at the start of the week. While the increase was not dramatic, it reflected a slightly more cautious tone as investors weigh several key risk factors.

The lack of progress at Friday’s Alaska summit, the upcoming Zelenskyy–Trump meeting in Washington, and the Jackson Hole Economic Symposium all remain potential catalysts for market swings. For now, volatility is elevated but still contained, suggesting markets are preparing for movement without fully pricing in a sharp spike in risk.

The much-anticipated Alaska meeting between Trump and Putin yielded little progress, with both sides agreeing only to disagree. Markets are now bracing for the Washington summit with Zelenskyy, though expectations for a positive outcome are low. Putin has extended an invitation for Trump to visit him in Moscow. But for now, the focus is squarely on Ukraine’s next moves.

Elsewhere, the week ahead will be dominated by the Jackson Hole Symposium, where Fed Chair Jerome Powell and his fellow officials may provide fresh clues over the possible interest rate path. 

Earnings also remain in the spotlight, with big-box retailers, such as Walmart, Target, Lowe’s, and Home Depot, all set to report results. So far, of the 92% of S&P 500 companies that have reported, 82% have beaten estimates.

Despite increased optimism around the probability of Fed rate cuts and a strong earnings season, markets look extended and fatigued after consecutive weeks of gains. Traders will be watching closely for signs of consolidation or correction as geopolitical risks remain elevated.