U.S. Stocks, Commodities, Macro Updates, and Futures Outlook

Source: Krish Capital Pty Ltd

Index Update

U.S. stocks hit new highs as cooler inflation data and a strong Oracle forecast lifted sentiment. The S&P 500 and Nasdaq closed at record levels, led by tech gains, while the Dow fell on weakness in Apple. A surprise drop in producer prices reinforced hopes of ongoing disinflation and raised market bets on a larger Federal Reserve rate cut next week.

Market Movers

On Wednesday, the top gainers were Wearable Devices Ltd (+407.84%), followed by JBDI Holdings Limited (+120.47%). On the contrary Epsium Enterprise Limited. (-70.72%), and QMMM Holdings Limited. (-47.10%) declined the most the same day.

Commodities Update

WTI and Brent crude oil prices slipped after a three-day rally as a surprise build in U.S. crude inventories signaled weaker demand, outweighing ongoing geopolitical risks. Despite the decline, oil remained supported by heightened tensions surrounding Russia’s breach of Polish airspace, U.S. calls for tougher sanctions, and Middle East unrest, though no direct threats to energy infrastructure were reported.

Gold prices edged lower but stayed near record highs, buoyed by expectations of U.S. interest rate cuts and safe-haven demand amid geopolitical strains. Softer U.S. producer price data reinforced speculation of Federal Reserve easing, while developments involving Russia, China, India, and escalating Middle East tensions added to gold’s appeal.

Macro Updates

U.S. Mulls Tougher Curbs on Chinese Drug Imports

The Trump administration is considering sweeping restrictions on drug imports from China, including stricter FDA reviews of Chinese clinical trial data, higher fees, and incentives to boost U.S. production of key medicines. The draft plan also proposes speeding up domestic drug approvals, reflecting concerns over China’s growing role in biotech innovation, which now accounts for nearly a third of global outlicensing deal value.

U.S. Inflation Expected to Pick Up in August

Annual inflation in the U.S. is projected to accelerate to 2.9% in August, the highest since January, driven by higher import tariffs, gasoline prices, and supermarket costs. Monthly CPI is seen rising 0.3%, while core inflation is expected to hold steady at 3.1%, with rents providing some offset to broader price pressures.

Dollar Holds Steady Ahead of Key Inflation Data

The dollar index stayed near 97.8 as traders awaited U.S. inflation figures that could shape expectations for Federal Reserve rate cuts. Softer producer price data eased inflation concerns and strengthened bets on policy easing, with markets largely pricing in a 25-basis-point cut and a small chance of a larger move. Political developments at the Fed included an appeal over a blocked firing of a governor and progress on a dovish nominee’s confirmation.

Bonds Commentary

The 10-year U.S. Treasury yield held near 4.05% as investors awaited key inflation data that could shape expectations for Federal Reserve rate cuts. Softer producer price figures eased inflation worries and reinforced bets on policy easing, with markets largely pricing in a 25-basis-point cut and a small chance of a larger move. Meanwhile, political developments around the Fed included the Trump administration appealing a court ruling on firing a governor and progress on a dovish nominee’s confirmation.

Futures Update

U.S. stock futures moved higher as investors awaited key inflation data that could influence the Federal Reserve’s upcoming interest rate decision. The European Central Bank is expected to keep rates unchanged at its policy announcement later in the week. On the corporate front, Adobe is set to report earnings after the market closes. All three major U.S. futures indices posted modest gains. Dow futures were up 35 points (0.1%), S&P 500 futures gained 8 points (0.1%), and Nasdaq 100 futures advanced 39 points (0.2%).

Stocks mostly moved higher early in Wednesday's session but lost some ground throughout the trading day. The S&P 500 rose by 19.41 points, or 0.30%, closing at 6,532.03. From a technical perspective, the index maintained support at important levels and steadily advanced, suggesting the possibility of further gains in the near term. However, the price closed near its daily lows yesterday, and if it breaks below the previous day's lows, there could be some downside movement. Additionally, the 14-day RSI is approaching the midpoint, which may indicate the potential for an upward trend. Key support levels are around 6,433, with resistance expected near 6,590.