US Stocks Rally on First Day of the Week – Nasdaq up 0.5%
US stock markets rallied on the first trading day of the week yesterday, with the Nasdaq hitting a fresh record close as investors factored in more Fed rate cuts. The Dow added 0.25% to move up to 45,514, the S&P rose 0.21% to 6,495, and the Nasdaq gained 0.45% to close at 21,798. Treasury yields continued to fall, the 2-year losing 2.3 basis points to 3.486% and the 10-year off 3.4 basis points to 4.040%. FX markets were busy again, the dollar ultimately closing lower on interest rate differential expectations, with the DXY down 0.31% to 97.46 by the close. Oil prices managed a rally after OPEC+ production hikes were not as large as expected, with Brent up 1.08% to $66.21 and WTI up 0.94% to $62.45 a barrel. Gold drove to more fresh highs, up 1.37% to $3,635.95 by the NY close.
Gold Powers Higher Again
Gold prices powered higher again in trading yesterday as market forces aligned to push the world’s favourite precious metal to yet more records. It smashed through the $3,600 level like a hot knife through butter early in the day and recorded its ninth positive day in the last eleven, as investors continued to buy on the back of lower anticipated US interest rates and geopolitical uncertainty across the globe. Initial support now comes in around the $3,580 level, which was yesterday’s low, with stronger support around the $3,500 mark, the previous all-time high. Risks to the momentum come from a calming of overall geopolitical uncertainty and a lowering of Fed rate cut expectations – and maybe some profit-taking – but these do not look likely in the coming sessions, and so traders are expecting any dips to be well supported.
Another Quiet Calendar Day Ahead for Traders
It looks like being a relatively quiet day for traders if the economic calendar is anything to go by. However, there are plenty of geopolitical updates anticipated to hit the market, so most will have their eyes glued to newswires as we progress through the day. There is the possibility of Chinese New Loans data (exp. 700Bio) coming out during the Asian session, which could add volatility to local markets. There are some central bank updates scheduled in the London session, with speeches from Buba President Joachim Nagel and Swiss National Bank Chair Martin Schlegel, with the latter likely to have the most propensity to move markets given the level of Swiss rates at the moment. There is little on the calendar to move markets in the New York session, but once again, geopolitical updates are likely to add volatility.
