Wall Street lacks direction, tech inches ahead

In FX, the US dollar was weaker across the board. On Monday, the Dollar Index hit a one-month high, briefly trading above 101.50. Yesterday, it dropped back below 100.00, before rallying into the close. But the dollar sellers were back in force this morning, and there’s a general understanding that the Trump administration would be pleased to see the dollar weaken further.

Meanwhile, the Japanese yen continues to be a major beneficiary from the dollar’s decline. Sterling also made gains on the back of the UK GDP beat, while the EUR/USD hovered either side of the 1.12 handle. With a slew of key data releases along with a speech from Fed Chair Powell due later today, currency traders are preparing for potential volatility, depending on how the numbers fall.

Gold slumped in early trade after breaching $3,200 - a level which had recently acted as support. It hit a low of $3,120, although it recovered quickly. It now looks as if the area around $3,140 to $3,150 is a more significant support area, as it acted as resistance back in April. Silver also faced heavy selling pressure, retreating alongside gold as the metals complex responded to shifting risk sentiment and the dollar’s back-and-forth action.

In early trade, silver dropped below $32 per ounce, revisiting lows seen at the beginning of this month. If it fails to recover quickly, then that could encourage fresh selling to find a more significant area of support.

Oil prices dropped sharply overnight, adding to yesterday’s losses. The retreat appears linked to short selling, possibly triggered by the latest bearish inventory report and continued concerns over oversupply. Additionally, signs of easing tensions in the Middle East are further dampening speculative buying interest.

Gas prices edged lower as well, although the move was marginal. Overall, the broader energy complex appears to be in pullback mode for now.

The crypto space came under pressure overnight, with losses seen across major coins. Bitcoin and Ether were both dragged lower as broader risk appetite faded and profit-taking emerged following recent gains. The reversal highlights the asset class’s continued sensitivity to global macro sentiment. Despite this, both Bitcoin and Ether continue to trade above $100,000 and $2,500, respectively.

The VIX hovered around the 19 mark, reflecting a slight uptick in volatility but still well below recent highs. With a packed economic calendar and Fed Chair Powell scheduled to speak, market participants remain alert to potential catalysts that could reprice risk in either direction.

Today’s session is packed with potentially market-moving events. US Retail Sales, weekly Unemployment Claims and the PPI inflation report all drop around lunchtime. Fed Chair Jerome Powell is also set to speak, and investors are hoping he may provide insight into the US central bank’s interest rate expectations.

Walmart reports earnings before the bell. The retail giant is one of the Dow’s key components, so its performance will be watched closely. It provides a unique insight into US consumer sentiment.

President Trump indicated that a deal with Iran is close, which may be feeding into oil’s pullback. Meanwhile, both Trump and Putin skipped peace talks in Turkey with Ukraine, leaving diplomatic efforts in limbo. Separately, Boeing and Qatar Airlines struck a record-breaking aircraft order deal, a notable development for the aviation space. UnitedHealth is reportedly under criminal investigation, potentially explaining the stock’s recent heavy losses.

Markets appear to have lost some upside momentum following the recent rally. Tech is still leading, but broader indices are showing signs of fatigue.

The US dollar has resumed its downward trajectory. Oil is now in retreat mode, driven by both technical and geopolitical factors.

All eyes now turn to today’s heavy economic slate and Walmart’s earnings, both of which could reset the tone heading into the end of the week. The bulls may be pausing, but the narrative remains fluid.