Geopolitics Drive Volatility as Equities Advance and Commodities Rally

Index Update: Market sentiment improved in the latter half of the week after President Donald Trump said the U.S. had reached a framework trade agreement related to Greenland and ruled out imposing tariffs on European countries, easing earlier geopolitical and trade concerns. He also stepped back from previous threats to use force over the Danish territory, providing relief to markets that had been rattled by escalating tensions. However, broader geopolitical risks remain elevated. Relations between the U.S. and Europe are still strained, and Trump raised fresh concerns by flagging possible military action against Iran, citing the movement of U.S. naval forces toward the region. U.S. equities posted a second consecutive day of gains on Thursday, with the Dow, S&P 500 and Nasdaq rising across the board. The rally was supported by the tariff reversal and a stronger macroeconomic backdrop, including an upward revision to Q3 GDP growth, steady jobless claims, in-line PCE inflation and resilient consumer spending.

Market Movers : On THursday, the top gainers were 60 Degrees Pharmaceuticals, Inc. (+152.00%), followed Blue Gold Limited (+103.83%). On the contrary, Envirotech Vehicles, Inc. (-26.10%), and Aptera Motors Corp. (-25.85%) declined the most the same day.

Commodities Update; WTI and Brent crude futures climbed on Friday, recovering some of the previous session’s losses as renewed U.S. threats toward Iran raised concerns over potential supply disruptions in OPEC’s fourth-largest producer. Prices were also supported by a weaker U.S. dollar, which improved the appeal of dollar-denominated commodities. Further underpinning oil prices, Saudi Aramco’s CEO played down fears of a global supply glut, pointing to record oil consumption last year and expectations of stronger demand in 2026. However, the International Energy Agency maintained that global oil supply is still likely to outpace demand this year, despite a modest upward revision to its demand growth outlook. Gold edged lower on Friday after hitting record highs, as investors paused following a strong rally, though bullion remains on track for its best weekly gain since March 2020. Support for gold continues to come from weakening confidence in U.S. assets, ongoing geopolitical tensions, and economic uncertainty, while in-line PCE inflation reinforced expectations that the Federal Reserve will hold rates steady next week. Silver surged to fresh record highs, rising nearly 3%, driven by a softer dollar, heightened geopolitical concerns, and strong demand for real assets. The rally was further amplified by a short squeeze, robust retail buying, and China’s tighter export controls, while expectations of steady Fed policy and potential rate cuts later in the year added to the bullish momentum.

Macro Updates: The U.S. dollar index hovered near 98.3 on Friday and was on track for a roughly 1% weekly decline, pressured by heightened geopolitical uncertainty. Market jitters were driven by President Trump’s shifting stance on Greenland, after initially threatening European countries with tariffs before reversing course following a framework agreement with NATO. Uncertainty was compounded by concerns that Europe could use its large holdings of U.S. assets as leverage, highlighted by a Danish pension fund’s move to exit U.S. Treasuries. Meanwhile, expectations that the Federal Reserve will keep interest rates unchanged next week also weighed on the dollar, with the sharpest losses seen against the euro and major antipodean currencies.

Bonds Commentary: The 10-year U.S. Treasury yield hovered near 4.24% on Friday, finishing a volatile week slightly higher as markets reacted to shifting geopolitical developments. Yields initially jumped to a five-month high after President Trump threatened tariffs on European countries over Greenland, before easing as he later reversed course following a framework agreement with NATO. Global bond market volatility, particularly swings in Japanese yields tied to fiscal concerns, also influenced Treasuries. Meanwhile, resilient U.S. economic data strengthened expectations that the Federal Reserve will keep interest rates unchanged at its meeting next week.

Futures Update

U.S. stock index futures edged lower on Friday, wrapping up a volatile week on a subdued note after weak earnings from technology heavyweight Intel dampened sentiment. Dow Jones futures declined by 110 points, or 0.2%, S&P 500 futures eased 15 points, or 0.2%, while Nasdaq 100 futures fell 90 points, or 0.4%.

Stocks largely moved higher throughout Thursday’s trading session, building on the strong gains from Wednesday. The major indices offset the significant losses experienced on Tuesday, with the Dow turning positive for the week. The S&P 500 increased by 37.75 points, or 0.55%, closing at 6,913.36. From a technical perspective, the index may face choppy trading in the near term as prices hover near an immediate resistance zone. The 14-day Relative Strength Index (RSI) is around the midpoint, suggesting ongoing indecisiveness at current levels. Key support is identified around 6,820—a critical level that could trigger a rebound—while resistance is expected near 6,970.