US Stocks Drop After Long Weekend – Nasdaq Off 0.8%
US stock indices dropped on the first day of trading after the weekend’s updates on the legality of President Trump’s tariffs. All three of the major indices fell as investor concern increased. The Dow lost 0.55% to 45,295, the S&P fell 0.69% to 6,415, and the Nasdaq fell 0.82% to 21,279. The dollar jumped higher, with the DXY up 0.57% to 98.32, and US Treasury yields pushed higher, the 2-year up 2.2 basis points to 3.639% and the 10-year up 3.3 basis points to 4.261%. Oil prices also jumped after news of increased US sanctions aimed at Iranian crude hit the market, Brent up 1.42% to $69.12 and WTI up 2.47% to $65.59 a barrel. Gold powered higher to a fresh all-time high at $3,540.28 an ounce as it broke through resistance levels at the previous high, closing the day up 1.64% at $3,533.16.
FX Markets in Focus This Week
FX traders are preparing for more moves across the board in the days ahead, and in a US jobs data week, for once, it is not all about the dollar. Both the pound and the yen took big hits in trading yesterday as markets started to price in tougher times ahead. The UK’s 30-year yield hit its highest level since 1998, which led to a sharp drop in sterling, and the yen took a hit on more political uncertainty, a relatively new phenomenon for Japanese markets. The dollar was the main recipient of these downside moves, but both currencies weakened on the crosses as well. Traders are now looking for opportunities across the board and are expecting plenty of volatility in the days ahead, with the focus likely to slip back to the dollar and the key Non-Farm Payroll numbers as the week progresses.
Full Calendar Day Ahead for Traders
The macroeconomic calendar kicks into gear today in what is a busy week ahead. Australian markets will be in focus early in the Asian session with the Quarterly GDP numbers set to be released; expectations for a 0.5% increase are priced into the market. We are also set to hear from RBA Governor Michele Bullock later in the day when she speaks in Perth. ECB President Christine Lagarde speaks shortly after the London open from Frankfurt; however, there will also be a strong focus on UK markets with the Bank of England’s Monetary Policy Report Hearings taking place in Parliament. The New York session sees the first key US jobs number release of the week with the JOLTS Job Openings data (exp. 7.38 mio) coming out shortly after the open, and we also hear from the Fed’s Neel Kashkari later in the day.
