Market Wrap: U.S. Stocks Rally, Oil Drops Over 4% Amid Ceasefire Talks – Forex Insights

On Tuesday, U.S. stocks made a recovery, with the Dow Jones Industrial Average rising 126 points (+0.30%) to 42,080, the S&P 500 up 55 points (+0.97%) to 5,751, and the Nasdaq 100 jumping 307 points (+1.55%) to 20,107. Technology stocks led the market rally, driven by gains in Palantir (+6.58%), Nvidia (+4.05%), and Apple (+1.84%).

U.S. Treasury yields were stable, with the 10-year yield remaining at 4.033%, as traders anticipated key inflation data later this week that could influence the Federal Reserve's November rate decision.

On the other side of the globe, Hong Kong's Hang Seng Index plunged 9.41%, marking its worst loss since 2008, while China’s CSI 300 Index surged 5.93% following the national holiday.

Oil prices faced significant pressure, dropping over 4% amid potential Israel-Hezbollah ceasefire negotiations. U.S. WTI crude oil closed $3.57 lower at $73.57 a barrel (-4.63%), breaking a five-session winning streak. Gold also continued its descent, slipping another $20 to $2,621 an ounce (-0.78%).

Market Wrap: Forex

In the forex market, the U.S. Dollar Index was steady at 102.47, while EUR/USD inched up to 1.0979 amid stronger-than-expected German industrial production data (+2.9% MoM).

The British pound gained slightly, with GBP/USD moving to 1.3104. Meanwhile, AUD/USD fell to 0.6745, and USD/CAD advanced to 1.3644 following news of Canada’s trade deficit.

Morning Trading

In the Asian session, the New Zealand dollar weakened further to 0.6110 after the Reserve Bank of New Zealand cut its interest rate by 50 basis points to 4.75%, as expected. Gold was marginally down to $2,619, while Bitcoin remained flat at $62,269.

Expected Today

• Germany's trade surplus data for August is expected at €19 billion.

• The U.S. will release FOMC meeting minutes and wholesale inventories, which could provide insight into the Fed’s outlook.

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Key Pivot Levels

• GBP/USD: Watch 1.3075 for potential downside if the price breaks lower.

• USD/JPY: Continuation of the rebound above 147.90 could target 148.70 and 149.10.

• Crude Oil (WTI): Resistance at $75.50 holds, suggesting downside targets of $72.40 and $71.00.

Crypto Watch

Bitcoin remains stable around $62,269, with key resistance at $63,500. A move above could see further upside towards $65,000.

Conclusion

Traders are cautious ahead of U.S. inflation data and the FOMC minutes, with equities showing resilience but commodities under pressure. Keep an eye on forex market movements driven by central bank actions.

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