European markets pause after strong run-up

US stock indices rallied sharply yesterday as they returned after the long holiday weekend. The buying was driven by relief over the postponement of President Trump’s proposed 50% tariffs on the European Union. The bullish reaction was swift and broad-based, with all major indices closing significantly higher.

The NASDAQ led the charge thanks to strength in the tech space, as anticipation built for NVIDIA’s earnings after the bell. Investors increased their exposure to the stock, pushing NVIDIA up over 3% on the day.

Source: TN Trader

The European Union tariff delay, now extended until July 9th, gave investors confidence to resume risk-taking following last week’s rollercoaster market.

Asian Pacific stock indices were little changed overnight, but with a slight negative bias.  Investors appeared quite cautious and chose to ignore the renewed strength across Wall Street. The divergence in performance points to lingering concerns in the region, particularly around tariffs, despite recent strength across the US and Europe.

Currency markets were relatively subdued overnight. The New Zealand dollar stood out, as it rallied across the whole currency spectrum after the Reserve Bank of New Zealand’s overnight rate cut.

Source: TN Trader

Elsewhere, the US dollar was mixed, with the Dollar Index effectively unchanged. The Japanese yen was firmer against most other currencies.

Gold prices recovered overnight, having slipped to $3,285 yesterday. Gold pushed back above $3,300 in early trade, but it’s not yet clear if this rally can build enough momentum to push much higher.

Source: TN Trader

The rally across equities appears to be limiting safe-haven flows for now, though underlying demand remains intact.

Silver continues to underperform relative to gold and remains well below the psychological $35 threshold - a level that would need to be broken to inspire renewed bullish conviction in the metal.

Oil prices were little changed earlier today, with front-month WTI trading on either side of $61 per barrel. The market continues to consolidate as traders await the delayed US weekly inventory data, which had been pushed back due to the Monday holiday.

Source: TN Trader

Without an obvious catalyst, oil continues to trade within a tight range, and sentiment remains divided amid ongoing concerns about supply dynamics, demand signals from China, and broader macro trends.

Natural Gas was flat in early trade, continuing to oscillate within a 3.20–3.60 BTU range. Market participants appear to be in a wait-and-see mode, with no major developments tipping the balance in either direction.

Traders are looking for fresh catalysts to drive a breakout of the current consolidation pattern.

The recent surge in cryptocurrencies appears to have stalled, with Bitcoin easing back from its record-setting levels. Bitcoin has dropped back below $110,000 but appears to be consolidating in a relatively narrow range.

It’s a similar story for Ether, which is also consolidating, but comfortably above the key $2,500 level.

The VIX continued to drift lower, falling beneath 20.00. The drop reflects the renewed calm in equity markets following the tariff postponement, which triggered the strong US rally.

While the drop in volatility suggests growing confidence, it also raises the possibility that markets may be under-pricing potential risks ahead, particularly with key earnings and Fed minutes on tap.

Today, the market's focus turns to key earnings reports and the release of minutes from the Fed’s last monetary policy meeting. Macy’s and Abercrombie and Fitch are expected to report ahead of the US open. After the close, attention will turn to generative AI chipmaker NVIDIA. These results could have significant implications for broader tech sentiment.

Meanwhile, the Fed minutes may offer further insight into policymakers’ thinking around tariffs, inflation, and future rate moves, providing valuable context for traders and investors alike.

Tesla shareholders welcomed news that CEO Elon Musk has ordered a return to the office - a move seen as positive for company productivity and culture.

On the geopolitical front, Trump said US-EU trade negotiations were progressing positively. At the same time, the US and UAE have announced deeper business cooperation, positioning their alliance as a strategic counter to rising global competition.

Markets are taking a moment to catch their breath following yesterday’s rally. The temporary easing of tariff concerns continues to support bullish sentiment. Today’s earnings and Fed minutes could provide the next directional cues.