The US stock market experiences rotation with tech underperforming. Central banks maintain a wait-and-see stance. The US dollar continues its weakness while Asian markets show mixed reactions amid trade threats.
Mixed performances in US stock indices, Gold dipped, Nikkei 225 stabilized at support
Rotation play was observed in US stock market on Tuesday, July 1, as previously top-performing mega-cap technology stocks were sold off. This led to the Nasdaq 100's underperformance, with a loss of -0.90%, while the prior laggard, the Dow Jones Industrial Average, advanced by 0.9% for the fourth consecutive session to close at 44,495, just 1% away from its current intraday all-time high of 45,074, printed in December 2024.
The fundamental driver that caused the sell-off in the mega-cap technology-heavy Nasdaq 100 was the Senate passage of US President Trump’s US$3.3 trillion tax and spending cut bill that senators voted to kill a controversial effort to prevent US states from regulating artificial intelligence, marking a major loss for major technology companies such as Microsoft, Meta Platforms, and Nvidia.
During a panel discussion at the ECB Forum on Central Banking yesterday, Fed Chair Powell reiterated “his stubborn wait and see” stance on interest rate cuts, which has annoyed US President Trump in the past week.
Have you read our monthly tactical view on EUR and EUR Cross pairs here?
At the same panel, BoJ Governor Ueda has also expressed the same “wait and see” view for additional data (the strength of Japan’s inflation trend and the effects of US tariffs) and is in no rush to raise short-term borrowing costs. After a pause on its key policy short-term interest rate at 0.5%, its highest level since 2008 at the last BoJ meeting in June, market participants are still expecting one more rate hike of 25 basis points in Q4.
Overall, the US dollar continued its weakness at a slower pace yesterday, where the US Dollar Index recorded its seventh consecutive session of losing streak with a marginal loss of -0.1% in today’s Asia session, the US Dollar Index has been flat as the US dollar recorded marginal intraday gains against the EUR (+0.08%) and JPY (+0.14%) while trading at the unchanged mark against the GBP and AUD at this time of the writing.
The Nikkei 225 is today's worst-performing Asia Pacific benchmark index. It declined for the second consecutive session, with an intraday loss of -0.12 after dropping as low as -1% to test intermediate support of 39,390 at the start of today’s Asian session.
The Nikkei 225's underperformance was triggered by US President Trump’s threat of imposing a higher tariff of 30%- 35% versus an earlier target of 24% on Japanese exports as US-Japan trade negotiations stall ahead of the 9 July expiration deadline for the implementation of US global reciprocal tariffs (excluding China).
Hong Kong stock market has reopened today after yesterday’s public holiday with an intraday rally of 0.6% seen in the Hang Seng Index, and Singapore’s Straits Times Index continued its bullish momentum to advance by 0.5% to hit another fresh all-time intraday high of 4,010
Gold (XAU/USD) is consolidating around US$3,340, holding above its 50-day moving average at US$3,318, now serving as intermediate support. This follows a two-day rally that delivered a 2.9% gain, which paused near the 20-day moving average resistance at US$3,360 as the market awaits the release of US ADP Employment Change data later today.
Our YouTube video above contains the latest intraday technical analysis on 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.
