US markets mixed as momentum slows, eyes on data and earnings

In currency markets, the US dollar found some mild support overnight, bouncing after broad-based losses during Monday’s session. Traders are watching closely as key data releases throughout the week will likely determine the next move for the greenback.

April saw the dollar’s largest monthly fall in 30 months, driven in part by tariff pressures and global trade uncertainty. The short-term outlook has become slightly more constructive for the dollar, as it remains very oversold against most other currencies. However, it may still be vulnerable over the long term, and choppy price action will likely persist.

This morning, gold was weaker in early trade, giving back most of yesterday’s gains. This time last week, gold rose sharply to hit a fresh all-time high of $3,500. But it was historically overbought, according to its daily MACD, and it pulled back sharply from here later in the day. It fell to $3,260 over the next 24 hours, for a high-low swing of $240, or 6.8%. This level has held as the low since then, with gold bouncing back modestly. Gold now needs to consolidate around current levels to help the MACD reset. 

Otherwise, it’s possible that there’s another deeper and more protracted sell-off, which could see gold retest $3,200 as support. With optimism building around a potential easing in the trade war, traders are questioning whether $3,500 may have marked a near-term top for the yellow metal. 

Meanwhile, silver continues to consolidate above $33 per ounce. While it is nowhere near overbought levels, investors seem reluctant to get involved in silver, no doubt put off by gold’s recent sell-off.

Oil extended losses, falling just under 1% overnight, compounding Monday’s weakness. Front-month WTI closed above $63 last week, and it pushed higher in early trade yesterday. But prices subsequently turned lower, selling off steadily from yesterday afternoon, before breaking below $61 earlier this morning. 

The moves follow OPEC’s recent output increase, which means additional supply coming online. This comes despite repeated downgrades to global demand growth forecasts, as there have been few concrete signs that the trade war between the US and China, let alone the rest of the world, is about to ease up.

Natural gas staged a bounce yesterday, climbing back through 3 btu after a prolonged slump. Gains were more modest overnight, but the recovery has injected some life back into the battered space.

Crypto markets rose again, with Ether leading the advance this morning. As investor risk appetite shows signs of picking up, Bitcoin continues to outperform. Bitcoin is currently consolidating around $95,000, taking it back within sight of the $100,000 level. Bitcoin’s recent price action may serve as a broader sentiment gauge for risk assets.

The VIX edged lower again, trading in the mid-23s in early trade this morning. Today’s move has extended its recent pullback from the elevated levels seen during last week’s trade-driven turbulence. While volatility is still well above historically calm ranges, the move signals a slow but steady rebuilding of investor confidence, particularly as markets begin to find their footing following weeks of sharp swings.

The ongoing decline in the fear gauge reflects a market that is attempting to stabilise in the face of unresolved trade tensions and lingering uncertainty over rate policy. While nerves haven’t fully calmed, and headlines remain a dominant force, the easing in volatility points to a more relaxed approach from investors — at least for now.

In Washington DC, Treasury Secretary Bessent stated China is ‘on hold’ for now as the US continues tariff talks with 15 to 17 other trading partners. The onus, Bessent said, is on Beijing to take the next step. Overnight, the US also confirmed that auto tariffs will not extend to steel and aluminium, calming some sector-specific concerns.

Canada’s Carney has won the national election, adding to this week’s busy geopolitical backdrop.

The earnings season picks up pace today, with GM, Pfizer, and Honeywell reporting ahead of the bell. The spotlight will then shift to big-name tech, with results from Microsoft and Meta Platforms tomorrow, with Apple and Amazon on Wednesday.

On the macro front, US JOLTS job openings and Consumer Confidence data are scheduled this afternoon. Looking further out, the Bank of Japan meets later this week, while Friday’s US Non-Farm Payrolls report will be the key economic event.

The focus has shifted back towards the bulls, with dip buyers appearing to have reclaimed the upper hand — at least for now. However, tariff uncertainty with China remains the overriding market driver, and that narrative can turn quickly.

The US dollar continues to trade choppily. While it found a bid overnight, its broader direction will hinge on this week’s data flow. Gold remains volatile while oil struggles and crypto quietly pushes higher.

With earnings and macro data colliding, volatility may return. But for now, the bulls have regained a bit of control heading into the heart of the week.