US Tech Stocks Rise Ahead of Earnings – Nasdaq Up 1.1%
US equity markets finished mixed yesterday, with technology stocks leading a recovery as concerns surrounding the AI sector eased and investors looked for value ahead of key Q3 earnings reports. The Nasdaq led the gains, jumping 1.11% to close at 26,430, while the S&P 500 advanced 0.41% to finish at 7,690. The Dow Jones Industrial Average struggled to make ground, slipping 0.07% to close at 51,966. Investors remain cautious ahead of another busy period for corporate earnings, although the rebound in technology stocks provided some encouragement following last week’s selling pressure.
US Treasury yields moved sharply higher across the curve, reversing some of last week’s declines as traders continued to reassess the outlook for Federal Reserve monetary policy. The policy-sensitive 2-year Treasury yield rose 6.4 basis points to finish at 4.772%, while the benchmark 10-year yield climbed 6.7 basis points to close at 5.140%. The stronger yields provided support for the US dollar, which advanced against the major currencies, with the Dollar Index gaining 0.19% to finish at 101.97.
Oil prices remained elevated as investors continued to assess the impact of escalating hostilities across the Middle East, with reports of a rising death toll in Yemen adding to concerns over the potential for further disruption to regional energy supplies. The major crude contracts experienced mixed trading conditions, with Brent slipping 0.53% to close at $109.28 per barrel, while WTI rallied 2.06% to finish at $103.50 per barrel. Despite the divergence, both contracts remain at elevated levels, with traders increasingly concerned about further escalation in the region.
Gold prices moved lower as the stronger US dollar and rising Treasury yields weighed on demand for the precious metal. Gold declined 0.61% to close at $4,139.67 an ounce, continuing to trade around important technical levels.
Gold Continues to Play to the Dollar’s Tune
While geopolitical uncertainty remains a potential source of support, elevated US yields and dollar strength continue to dominate short-term price action, with traders closely monitoring both markets for further directional moves as the dollar’s haven attraction continues to outweigh that of gold.
Gold moved back towards support levels in trading yesterday, and traders are watching closely to see if it breaks out of the rangebound conditions that we have seen in October. It has found support on a few occasions just above the $4,050 level and capped out just above the $4,200 level on several occasions, and it does look like the next big move in the dollar will see a break one way or the other.
Trendline support on the daily chart now comes in around $4,088, with stronger support at the recent low of 4,065.14, while initial resistance sits at the October high of $4,225.09, with stronger resistance much higher up near the $4,450 level.
Calendar Picks Up, But Geopolitics Set to Dominate
The macroeconomic calendar picks up again today, with several important economic releases scheduled across the Asian and European trading sessions. The Asian session will see China’s Loan Prime Rate updates (1-year exp. 3.00%, 5-year exp. 3.50%), while attention will shift to the UK during European trading, where the latest Claimant Count Change (exp. +19.4k), Unemployment Rate (exp. 4.9%) and Average Earnings Index (exp. +3.8% 3m/y) figures are due.
Sterling traders will be particularly focused on the UK employment numbers as they assess the likelihood of a Bank of England interest rate increase at its next policy meeting. Any significant deviation from market expectations could trigger fresh volatility in the pound, particularly given the recent pressure on the currency.
Beyond the economic calendar, geopolitical developments in the Middle East are expected to remain a major focus for investors, with oil markets particularly vulnerable to further escalation. Corporate earnings, US Treasury yields and movements in the dollar will also remain important drivers of broader market sentiment as the day progresses. However, most traders are expecting any fresh geopolitical updates to dominate fundamentals today.
Explore all upcoming market events in the Economic Calendar.
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