Asian Pacific indices firmer

US stock index futures mostly edged higher in early trade on Tuesday. Investors shifted their focus towards this week’s packed earnings calendar and the Federal Reserve’s two-day monetary policy meeting, which concludes tomorrow. Monday’s regular session set a constructive tone, with the Dow, S&P 500 and NASDAQ neatly stacking up with gains of 0.6%, 0.5% and 0.4% respectively.

Source: TN Trader

The small-cap Russell 2000 bucked the bullish trend by ending 0.4% lower. But it has had an extraordinarily good run of late, hitting a new all-time high last Thursday. After last night’s close, shares of major US health insurers sold off sharply after the ‘Centers for Medicare & Medicaid Services’ proposed a minimal net increase to Medicare Advantage payments for 2027.

Humana dropped 12%, and CVS Health slid nearly 10%. UnitedHealth (which reports today) has fallen close to 13% since Friday’s close. Losses across these healthcare giants continue to weigh on the Dow, and the futures were lower overnight and into early European trade. More than 90 S&P 500 companies are scheduled to report this week, including four constituents of the ‘Magnificent Seven’.

Meta Platforms, Tesla and Microsoft release their earnings after the close on Wednesday, followed by Apple on Thursday. Investors are also navigating renewed trade tensions after President Donald Trump said he would raise tariffs on South Korean autos, pharmaceuticals and lumber to 25% from 15%, citing delays in ratifying a trade agreement.

The news was shrugged off as it is believed that the threat will galvanise South Korean policymakers into action. Attention now turns to today’s earnings reports, which include those from UnitedHealth, American Airlines, Boeing, Texas Instruments and General Motors.

It’s worth noting that the Dow, S&P 500 and NASDAQ are once again testing resistance at the top of their recent consolidation ranges. The S&P is currently hovering below 7,000, so a break above here would be significant. A failure to push above here and then hold on to any pullback would signal a market which has lost its upside momentum.

European stock indices were generally firmer on Tuesday, supported by optimism around corporate earnings. Investors are watching earnings from major industrial and luxury names this week, including ASML, Volvo, LVMH and Deutsche Bank, with Atlas Copco, Sandvik and Logitech reporting today. There was some good news on the trade front.

Earlier today, Indian Prime Minister Narendra Modi announced that India and the European Union had sealed a “landmark” free trade agreement, which represents about 25% of global gross domestic product and about a third of global trade.

Source: TN Trader

The US Dollar Index fell again this morning to a four-and-a-half month low. This took the cash below 96.30, which means that it is within sight of last September’s three-and-a -half year low of 95.83. The US dollar is really out of favour, and, once again, short positioning is becoming extreme.

This is having a few knock-on effects, one of which is the surge across precious metals. Market participants remain cautious ahead of the Fed meeting, even as rate expectations remain largely unchanged for now. 

The Japanese yen strengthened further today. The USD/JPY has fallen sharply since Friday last week, as traders covered their short-yen positions on concerns that the US and Japan were preparing to intervene together to support the yen.

If it falls much further, then this will raise fears that the Japanese carry-trade could unwind. If so, this could have a negative effect on risk assets.

Source: TN Trader

Gold broke above $5,100 early on Monday morning to register a fresh record high. It then fell back to $5,000 by yesterday’s close, where it found decent support, which propelled it back up to $5,100 once again. It has now extended its rally for a seventh straight session.

Source: TN Trader

Safe-haven demand remains robust amid geopolitical uncertainty, trade tensions and expectations that the Federal Reserve may cut rates twice in 2026. Central bank buying and retail demand have continued to underpin gold’s move, keeping the broader trend intact for now, helped along by the weaker dollar. 

There’s been little evidence of profit-taking so far, and that may be required for gold to make additional gains. Traders may exercise some caution ahead of the Federal Reserve’s FOMC meeting tomorrow.

Silver had an explosive session yesterday, soaring over 12% to a fresh all-time high above $117 per ounce. This was its biggest intraday gain since 2008. It subsequently pulled back sharply, but has renewed its rally this morning. 

Silver appears to be well supported by safe-haven flows, political uncertainty, and the broader rotation into real assets driven by concerns around fiscal spending and currency debasement. 

Some analysts are saying that silver has entered a new paradigm and is unlikely to pull back much from current levels. History suggests that this could prove a costly theory.

Source: TN Trader

Following yesterday’s pullback, crude oil managed to find support to reverse yesterday’s losses. Front-month WTI was pushing up towards $62 per barrel, which, should it hit, would represent a three-month high. Across a large area of the eastern US, Arctic weather has caused supply disruptions that shut in up to 2 million barrels per day over the weekend.

Source: TN Trader

But this was offset to some extent by expectations of increased supply, as Kazakhstan prepared to resume output at its largest oilfield and its main export terminal returned to full capacity.

Geopolitical risks remain in focus, including tensions involving Iran and renewed uncertainty around Venezuela, though for now these factors have failed to provide lasting upside momentum.

Natural gas prices pulled back following their recent sharp rally. This was helped along by Arctic cold weather in the US. Recent gains have proven difficult to sustain as weather-related demand eases and volatility remains elevated. The market continues to trade in wide ranges, reflecting uncertainty around near-term supply and demand dynamics.

Bitcoin and Ether were a touch softer overnight, giving back some of yesterday’s gains. Both cryptos remain mired within a broad band of support, yet both appear vulnerable to another leg lower. What is now quite apparent is that Bitcoin and Ether are no longer responding to the uptick in risk appetite, which has shown up across US equities.

Instead, both are partially correlated to the US dollar, which has come under significant downside pressure of late. It could be the greenback which holds the key to the next significant move across cryptos.

The VIX remained stable. Despite heightened geopolitical headlines and a heavy event calendar, volatility continues to signal relatively calm conditions, suggesting investors remain confident that any pullbacks will be contained.

Markets are entering a pivotal stretch. Upside earnings momentum has been decent, but attention now turns to the Federal Reserve’s policy guidance and whether it validates expectations for future rate cuts. Consumer confidence data today and the Fed decision tomorrow are likely to set the tone. 

Gold and silver remain at historically high levels, highlighting a stark contrast with equity complacency. Oil and gas continue to struggle for direction, while crypto drifts lower, following the US dollar. With major earnings still ahead and central bank risk looming, the coming sessions are likely to test whether confidence can hold—or whether volatility finally wakes up.