Stocks Pull Back as Tariff Concerns Rise Again – Nasdaq Down 0.75%
US stock markets pulled back in trading yesterday after their longest winning streak in two decades, as trade concerns increased after President Trump threatened more tariffs and investors looked ahead to this week’s Fed meeting. The Dow dropped 0.24%, the S&P 0.64%, and the Nasdaq lost 0.74%. Treasury yields edged higher again, the 2-year up 0.8 basis points to 3.832%, and the 10-year gained 3.5 basis points to 4.342%, whilst the dollar fell against the majors, the DXY down 0.21% to 99.79. Oil prices hit multi-year lows as OPEC+ confirmed accelerated output increases, Brent off 1.0% to $60.13, and WTI down 1.90% to $57.18 a barrel. Gold jumped higher on haven flows, gaining 2.93% by the close to finish up at $3,333.26.
Black Gold Still in Trouble
Oil prices dropped to multi-year levels in trading yesterday as OPEC+ delivered on well-telegraphed increased supply promises. Prices have been hit on both the demand and supply sides over the last few weeks and months, as trade tensions between the world’s two biggest economies in particular, and between the US and everyone else in general, threaten global growth and demand, whilst internal issues in the oil-producing world have led to production increases. OPEC+ members are increasing production and the rate of those increases to punish some other members which are already overproducing, and if this pattern continues, we should only see further downside for ‘Black Gold’. WTI found a short-term base just above the April low of $55.12, and if we see a break of that over the next few sessions, expect this move to pick up more momentum.
Markets to Remain Busy on Quiet Calendar Day
The global economic calendar is relatively quiet today; however, traders are expecting to see more volatility across markets from geopolitical updates, especially in the Asian session, which saw big moves in some emerging markets yesterday. The Asian session has little on the calendar to excite traders, but growth concerns may weigh again to increase volatility. It is mainly third-tier data that is due out once Europe opens as well, although Swiss franc traders will be prepared for a scheduled update from Swiss National Bank Chairman Martin Schlegel when he talks in Zurich midway through the morning. The New York session is also relatively quiet today.
