Asian Pacific indices mostly higher

US markets closed broadly lower on Thursday, marking the S&P 500’s fifth straight decline and leaving the index down 1.2% for the week. Both the Dow and the NASDAQ lost 0.3%, while the Russell 2000 bucked the trend to close 0.2% higher.

Source: TN Trader

This move was consistent with the observation that investors have been lightening up of frothy, growthy tech stocks, and seeking out value in US small cap stocks, such as those found in the Russel. But overall, selling pressure persisted across most sectors as investors positioned themselves ahead of Federal Reserve Chair Jerome Powell’s highly anticipated Jackson Hole address later today.

In after-hours trading, Intuit fell nearly 6% despite posting fiscal Q4 results that topped expectations, while Zoom gained 5% after beating on both revenue and earnings. Markets now assign a 71% probability of a Fed rate cut at the September meeting, down from 84% earlier this week. This reflects investor concern that Mr Powell’s speech may prove to be quite hawkish in tone. This is his last Jackson Hole address before he steps down in May next year.

Some commentators have posited that he may take this opportunity to deliver a strong warning over tariffs or even let rip directly at President Trump, given the latter’s personal attacks on the Fed Chair.

US stock index futures were weak overnight but pushed back into positive territory after the European open. But overall, the tone was subdued and reflected caution as traders await Powell’s keynote speech.

European stock indices were mixed overnight, but headed higher soon after the open, taking their lead from the modest strength across US stock index futures. Both the German DAX and the UK’s FTSE 100 were hovering close to their respective all-time highs.

Source: TN Trader

In the case of the DAX, this was hit in early July, while the FTSE made a fresh record close yesterday. Buyers have flocked into the UK’s top equities this week as they are seen as being good value and a safer bet than the somewhat frothy US market leaders.

Yet sentiment remains cautious, even after confirmation yesterday of the EU-US trade agreement struck last month. The deal includes an EU commitment to purchase $750 billion in US energy, together with an additional $600 billion in direct investment. In exchange, the Trump administration has promised to reduce its tariffs on US imports from the EU, capping them at 15% versus the 30% originally threatened by Washington.

Pharmaceutical exports benefited from this tariff certainty, which helped to lift the sector by around 0.6% yesterday. But the auto sector lagged as officials clarified that duty cuts remain conditional on reciprocal EU moves, which dampened sentiment.

The US dollar extended its recent rally, firming up against the euro and Japanese yen. The Dollar Index pushed up towards 98.50 to trade at its best levels in over a fortnight. This comes as investors reduced their expectations for a 25-basis point rate cut from the Fed next month ahead of Jerome Powell’s much-anticipated Jackson Hole address later today.

Aside from this, Forex markets continue to be relatively subdued as many traders sit on their hands ahead of Mr Powell’s keynote address later today.

After a quiet start to the week, gold rallied sharply on Wednesday before topping out around $3,350. It tried again to break and hold above here yesterday, but once again it held as resistance as the upside momentum faded, and the buying dried up. Gold was down again this morning, as traders focused on the recent dollar strength. But despite this, gold has managed to hold onto most of Wednesday’s gains.

Source: TN Trader

As with just about everything, the market is relatively quiet as traders sit on their hands ahead of Jerome Powell’s speech, scheduled for 15:00 BST this afternoon. Silver also bounced on Wednesday and has managed to hold onto these gains for the most part. It has spent today’s session so far trading either side of $38 per ounce. Both precious metals remain rangebound.

Crude eased back a touch in quiet trade this morning, and overall sentiment remains cautious. Over the course of this week, prices have steadied and appear to be forming a base following a sharp sell-off in the first two weeks of this month. But just how firm that base is remains to be seen.

Source: TN Trader

Of course, the background to this is the outlook for both supply and demand, not just for this year but going forward into 2026 as well. Recent forecasts suggest that the market remains well supplied and should easily outstrip demand growth, which continues to slow. But as far as the headlines are concerned, the prospect of a peace deal between Ukraine and Russia seems likely to influence prices in the short term.

If a deal is reached, then that should mean an end to sanctions on Russian production, suggesting even more supply coming onto the market (although that assumes that Russian oil is simply being stored in barrels, rather than being sold to India and elsewhere). But as things stand, it looks as if peace in Eastern Europe is still some way off.

Natural gas was lower this morning, giving back some of yesterday’s gains. The latest US inventory report from the Energy Information Administration showed a larger-than-expected drawdown in gas yesterday. But it appears that profit-taking has come in today from traders who are not entirely convinced that the bottom is in. 

Despite this, natural gas has managed to establish a tentative base after recent downside pressure. The market appears to be consolidating after recent declines, yet conviction among buyers remains limited.

The ability to hold this support will be critical in shaping near-term sentiment, with traders eyeing upcoming supply and demand data for direction. Until then, the outlook remains neutral-to-soft, and any renewed selling could see gas retest recent lows.

Bitcoin edged higher this morning, and so far, support around the $112,000 level has help. This tentative recovery follows recent volatility, which came straight after Bitcoin hit a fresh all-time high just over a week ago. Ether has also pulled back from last week’s record high. It has bounced this morning, although the daily MACD still suggests that Ether remains overbought.

Crypto remains sensitive to broader risk sentiment and could face renewed swings depending on macro headlines. Still, today’s tone is incrementally more constructive compared to earlier in the week.

The VIX pushed up as caution dominated ahead of Jerome Powell’s keynote speech later today. The move underscores growing investor unease following this week’s sell-off across US equities.

Despite this, volatility remains relatively well contained, for now. With key macro catalysts on the horizon, traders appear to be adding hedges, positioning for potential swings in response to Mr Powell’s remarks and President Trump’s expected comments later in the day.

Markets enter Friday awaiting Mr Powell’s Jackson Hole address as the marquee event of an otherwise subdued week. President Trump’s remarks later in the day will also command attention, particularly given the uncertainty over ongoing trade policy. For now, sentiment appears fragile, with indices at a crossroads and in need of a fresh catalyst to regain momentum.