US stocks see choppy trading as tariff news and Fed testimony impact sentiment. The US dollar continues its decline. Asian markets largely rally. Our technical analysis covers key market moves.
Nikkei 225 outperforms, US dollar weakens to multi-year lows
The past two days of risk-on euphoria in the US stock market have started to dissipate as market participants now focus on key economic data, the Fed’s monetary policy guidance, and US tariffs policy news flow as the US White House’s 90-day pause on global reciprocal tariffs (excluding China) is set to expire on 9 July over Israel-Iran affairs.
Wednesday, 25 June’s intraday gains of the four major US stock indices seen at the opening hour of the US session were almost erased. The Dow Jones Industrial Average and the small-cap Russell 2000 underperformed, with losses of -0.3% and -1.2%. Meanwhile, the S&P 500 remained unchanged, and the mega-cap, technology-centric Nasdaq 100 hit a fresh intraday all-time high, gaining 0.2% with the help of AI juggernaut Nvidia, skyrocketing by 4.3% to close at a fresh all-time high.
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In contrast, most Asian benchmark stock indices have continued to bask in a risk-on limelight today, supported by a weaker US dollar. Japan’s Nikkei 225 outperformed in the Asia Pacific region at this time of writing with an intraday gain of 1.40% as it broke above a 7-week sideways configuration to hit a 4-month high. Singapore’s Straits Times Index added 0.21% while Hong Kong’s Hang Seng Index slipped by -0.5%.
Fed Chair Powell’s second day testimony to the US Congress (Senate Banking Committee) echoed the same remarks made on his first day testimony on Tuesday, 24 June. He said that the US Federal Reserve is still struggling to determine the impact of the US White House’s tariffs on consumer prices, and the Fed does not need to rush to lower interest rates.
The greenback slipped for the third consecutive session, as the US Dollar Index ended Wednesday, 25 June, with a daily loss of -0.3%. On Wednesday, the euro rose for a fifth straight day to $1.1665, its highest level against the US dollar since October 2021, and the sterling hit its highest since February 2022 at $1.3670.
In today’s Asia mid-session, the US Dollar Index extended its decline with an intraday loss of -0.2% towards 97.53, just a whisker away from its long-term secular support of 97.40 where a bearish breakdown with a weekly close below it may trigger the start of a major (multi-month) downtrend phase for the US dollar.
The top three strongest performing major currencies at this time of writing against the US dollar are the GBP (+0.3%), JPY (0.2%), and AUD (+0.1%). An interesting observation to note is the Japanese yen, where the USD/JPY trimmed yesterday’s intraday gains to trade lower in today’s Asia session at 144.80, below the 145.00 psychological level ahead of tomorrow’s key Tokyo inflation and Japan’s retail sales data releases where the consensus expects core inflation trend in Tokyo to slip lower to 3.3% y/y in June from 3.6% printed in May but still firmly above Bank of Japan’s inflation target of 2%.
Gold (XAU/USD) has managed to hold above a key intermediate support at US$3,300 and its 50-day moving average, inched up slightly higher by 0.05% to US$3,334 in today’s Asia session, assisted by a softer US dollar.
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 can be found in our YouTube video above.
