U.S. Markets Update: Trade Optimism, Inflation Watch, and Commodity Swings Drive Mixed Sentiment

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Index Update: U.S. and Chinese negotiators reached a preliminary trade agreement in London, pending approval from Presidents Trump and Xi, while the U.S. signaled a possible extension of tariff pauses for cooperative nations. In corporate news, Oracle shares surged over 7% after posting strong fiscal Q4 results. Meanwhile, major indexes ended mixed, with the S&P 500 and Nasdaq posting losses and the Dow remaining flat.

Market Movers: On Wednesday, the top gainers were 707 Cayman Holdings Limited (+73.07%), followed by XTI Aerospace, Inc (+65.57%). On the contrary XCF Global, Inc (-73.28%) and Liminatus Pharma, Inc (- 50.45%) declined the most the same day.

Commodities Update: Crude oil prices pulled back after reaching two-month highs, as tensions between the U.S. and Iran raised fears of supply disruptions. The U.S. initiated a partial evacuation of personnel in the Middle East after threats from Iran, while oil prices were also supported by easing U.S.–China trade tensions and a larger-than-expected draw in U.S. crude inventories, signaling strong demand. Additionally, softer U.S. inflation data boosted expectations of a Federal Reserve rate cut, which could further stimulate oil demand. Gold rose above $3,380 per ounce, driven by heightened geopolitical risks and anticipation of U.S. trade policy shifts. Demand for the safe-haven asset increased after Iran's threats and Trump's renewed tariff push. Meanwhile, silver retreated slightly after a strong rally but remained underpinned by tight supply, strong industrial use, and rate cut expectations fueled by soft inflation data. Both metals benefited from growing market confidence in potential Fed easing later this year.

Macro Update: U.S. producer prices are expected to rise by 0.2% in May 2025, recovering from a sharp 0.5% drop in April—the steepest since April 2020. Core PPI is projected to increase by 0.3% after a 0.4% decline, the largest since 2015. Annually, headline producer inflation is forecast to rise to 2.6%, while core inflation is expected to hold steady at 3.1%. Investors are closely monitoring the data for signs of tariff-related inflationary pressures.

Futures Update: U.S. stock futures declined as investors reacted cautiously to a modest consumer price report and ongoing trade developments between the U.S. and China. Despite a slower-than-expected rise in consumer prices, market sentiment remained subdued due to lingering concerns over potential tariffs. A tentative trade agreement between Washington and Beijing was received with skepticism, as it lacked firm commitments and left uncertainty about the long-term outlook. Major indexes showed mixed performance, with the S&P 500 and Nasdaq pulling back, while the Dow remained flat.

After initially moving higher during the session, the stock market retraced its gains throughout Wednesday's trading day. The S&P 500 declined by 16.55 points, or 0.27%, closing at 6,022.25. From a technical analysis perspective, the index is currently near a confluence zone and has formed a bearish candle on the daily chart, indicating the possibility of a mild correction in the coming days. Nevertheless, the index remains above its key exponential moving averages, which supports a positive outlook and suggests these levels could serve as near-term support. The key support level is around 5,888, while resistance is anticipated near 6,066.