European futures muted

US stock index futures edge higher

US stock index futures were firmer in early trade on Monday, as investors brace for a week dominated by earnings from some major tech names. This followed a mixed session on Friday, which saw the Dow close 0.3% lower, the S&P 500 end effectively unchanged, and the Russell 2000 lose 0.6%. The NASDAQ was the only index to end in positive territory, eking out a gain of 0.1%.

For the week overall, the S&P added 0.6%, while the Nasdaq surged 1.5%, driven by strong tech momentum and upbeat corporate results. The Dow lagged slightly, ending the week marginally lower, weighed down by rotation out of defensives and industrials. The Russell 2000 added 0.2%.

Source: TN Trader

With earnings season picking up several gears and trade tensions heating up again, markets look poised for a week of headline-driven swings, especially as investors look to tech giants for reassurance on sales and earnings.

Tariff countdown: August 1 ‘hard deadline’

Trade tensions remain a central theme as the countdown to the 1st of August tariff deadline proceeds. On Sunday, US Commerce Secretary Howard Lutnick reinforced the administration’s firm stance, insisting that the 1st of August was the “hard deadline” for countries to begin paying tariffs. He did, however, leave the door open for post-deadline negotiations, saying, “Nothing stops countries from talking to us after August 1.”

Markets have taken note. With talks ongoing and few signs of any last-minute breakthroughs, investors remain wary of further escalation. 

The clarity from Mr Lutnick signals that the administration intends to follow through this time, meaning the clock is now ticking for key trading partners to strike deals or face penalties.

Asian Pacific markets close mixed

Asian Pacific stock indices ended mixed on Monday. Australia’s ASX led the losses, closing down 1.0%, while the Japanese Nikkei was closed for a market holiday. Japan’s ruling coalition, led by Prime Minister Shigeru Ishiba, suffered a historic defeat in upper-house elections. 

There are several ways in which this situation could be resolved politically, but economically, it seems likely to result in further fiscal stimulus, which will add even more debt to the country’s balance sheet. 

While investors were unable to react via the stock market, the news led to a sharp rally in the Japanese yen, which ironically was sought out as a safe haven. Hong Kong’s Hang Seng ended up 0.6%, while the Shanghai Composite rose 0.7%. The People’s Bank of China kept both the 1 and 5-year Loan Prime Rates unchanged, as expected.

Yen leads G10 after election shake-up in Japan

The Japanese yen strengthened against all other major currencies overnight following the ruling party’s defeat in Japan’s upper-house election. The result has increased political uncertainty and prompted a reassessment of positioning, leading traders to rotate back into the traditionally safe-haven currency. 

The yen had been on the defensive for the past two weeks as polling showed the potential for political upheaval. The result has now been confirmed, and investors are rebalancing their Forex exposure. Elsewhere, both sterling and the euro were firmer against the dollar, though broader movement was limited in early Monday trade.

Source: TN Trader

Gold and silver push higher, but upside still capped

Precious metals began the week with a solid bid, with both gold and silver edging toward the upper end of their recent ranges. The safe-haven appeal of metals remains intact given ongoing macro uncertainty, but neither asset has yet shown the momentum needed to break decisively higher. 

Gold continues to flirt with key resistance but lacks a catalyst to trigger fresh upside. Silver, while also apparently well supported, faces a similar ceiling. Traders remain focused on potential triggers for a breakout, including central bank policy updates and the evolving tariff situation.

Source: TN Trader

Oil drifting and directionless

Crude was little changed in early trade on Monday, albeit with a lower bias. The market remains in wait-and-see mode as supply/demand dynamics and geopolitical risk continue to be the chief drivers of price. New sanctions against Russia are being watched closely, but so far, they’ve had little effect on price action.

With demand forecasts largely intact and supply still a key swing factor, traders appear content to hold positions until more clarity emerges. For now, front-month WTI continues to trade around $66 per barrel, with both bulls and bears lacking the conviction to push decisively in either direction.

Natural Gas drops 5%

Natural Gas prices tumbled 5% to start the week, marking the largest move among major commodities in early Monday trading. Warmer weather and subdued demand appear to be weighing heavily on sentiment, leading to a sharp pullback after recent strength.

The commodity remains locked in a wide 3-to-4 BTU trading band, and this latest move reinforces just how volatile gas can be. In the sessions ahead, traders will be watching closely for updates on weather forecasts and storage data.

Bitcoin hovers below $120,000

Bitcoin was trading just shy of $120,000 in early trade on Monday. Momentum continues to favour the bulls, with both Bitcoin and Ether holding recent gains. But while Bitcoin appears to be consolidating after soaring to an all-time high of $123,000 this time last week, Ether looks very overstretched to the upside. Ether’s month-long rally has seen it gain 78%. 

The daily MACD is now looking very overbought, so a pullback shouldn’t come as a surprise. But markets can remain overbought or oversold for long periods. And there will be traders out there looking to take Ether up to challenge record highs just north of $4,000.

VIX dips slightly

The VIX was another market which was little changed in early Monday trade. Despite looming trade deadlines and major earnings on deck, the index suggests a market still relatively at ease with itself. Volatility has been relatively flat for over two months now.

This could be tested in the coming days, especially as tech giants begin reporting and the August 1 tariff deadline approaches.

Market outlook

US stock index futures were pushing higher in early trade, buoyed by optimism around earnings, some decent economic data and the market’s resilience last week. While tech results may dictate the early tone, the August 1 tariff deadline and next week’s Fed decision will eventually take over the narrative. Volatility could return fast if talks break down or earnings disappoint. The coming days may test just how durable this market optimism really is.