US stocks show mixed performance. The US dollar rebounds on Fed rate cut bets reduction. Asia Pacific markets demonstrate resilience due to positive US-China tariff news and local strength.
US stocks sold off, Asia outperformed, US dollar extended gains, and Gold’s slide stalled at key support
All the major US stock indices, except for the Nasdaq 100 (thanks to Nvidia), ended Tuesday’s US session, 15 July, in the red. The S&P 500 failed to maintain its initial bullish momentum after it printed a fresh intraday all-time high of 6,302 at the first hour of the US session and drifted downwards and ended with a daily loss of -0.4%. Small-caps Russell 2000 (-2%) and Dow Jones Industrial Average (-1%) were the worst performers. The technology-heavy Nasdaq 100 managed to ink out a meagre gain of 0.1%.
Dismal intraday performances of JP Morgan (-0.7%), Wells Fargo (-5.5%), and BlackRock (-5.9%); ex-post Q2 earnings releases also reinforced yesterday’s underperformance of the Dow Jones Industrial Average, as the Dow has a higher significant weightage in the financial sector versus the S&P 500 and Nasdaq 100.
The macro factor that influenced the negative performance of the US stock market yesterday was the June US CPI data, which indirectly increased the risk of a liquidity reduction in the US economy via a less dovish Fed.
Tariff-induced inflation fears crept back despite the core US CPI for June coming in slightly below expectations (actual: 2.9% y/y, consensus: 3% y/y) due to a jump in prices of several categories. Several categories within the CPI basket jumped: household furnishings were up 1%, the biggest rise since January 2022, video and audio products were up 1.1%, the most since February 2024, and toy prices were up 1.8% on the month, the most since April 2021.
According to the latest data from the CME FedWatch tool, the odds of a 25 bps Fed funds rate at the 17 September FOMC meeting have been reduced to 57% from a 60%-70% chance a week ago.
A reduction in the Fed’s rate cut bet for the September FOMC meeting has also triggered a broad-based US dollar rebound against the major currencies. The US Dollar Index extended its gains for the fourth consecutive day, rallying by 0.6% yesterday to hit a three-week high of 98.79, just a whisker below its 50-day moving average at 98.90, a key intermediate resistance because the US Dollar Index has traded below its 50-day moving average since 13 February 2025.
Most Asia Pacific stock markets have shown resilience today at the time of this writing, except for South Korea’s KOSPI 200 (-0.8%) and Australia’s ASX 200 (-0.7%), and managed to repel the negative feedback loop of a firmer greenback.
Hong Kong’s Hang Seng Index extended its intraday gain for the fifth consecutive session with a rally of 0.3% and hit a four-month high. Singapore’s Straits Times Index has maintained its red-hot bullish streak to print another intraday fresh all-time high for the eighth consecutive session, notching an intraday gain of 0.2% to advance to 4,129. Japan’s Nikkei 225 was unchanged.
A positive US-China tariff-related news flow has also reinforced the rosy performance of the majority of the Asia Pacific stock indices. US Treasury Secretary Scott Bessent, now becoming a clear point person in the U.S.-China trade negotiations, mentioned that talks between both countries are in a very good place ahead of an expected meeting in the coming weeks. He also highlighted that the 12 August deadline for a US-China tariff truce is “flexible”, and not to worry about it.
Despite a stronger US dollar, Gold (XAU/USD) did not see a significant sell-off yesterday, where its intraday decline of -0.6% has been stalled at the 50-day moving average, acting as a key intermediate support at US$3,328.
In today’s Asia session, Gold (XAU/USD) has managed to stage a rebound with an intraday gain of 0.5% supported by stagflation risk.
Our YouTube video above contains the latest intraday technical analysis on US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
