US Stocks Slip Ahead of Key Earnings – Nasdaq down 0.6%
Global markets traded cautiously overnight as investors weighed the ongoing escalation of tensions in the Middle East against the prospect of another busy earnings session and a significant day for central bank policy. While equities finished modestly lower, commodity markets remained firmly bid as geopolitical risks continued to dominate investor sentiment.
On Wall Street, the major indices closed mixed to lower. The Dow Jones was virtually unchanged, slipping just 0.01% to finish at 52,218, while the broader S&P 500 eased 0.14% to 7,498. Technology stocks again came under pressure, with the Nasdaq declining 0.57% to close at 25,690 as investors continued to reduce exposure to higher-growth sectors amid rising bond yields.
US Treasury yields continued their upward move as inflation concerns resurfaced. The 2-year Treasury yield climbed 3.6 basis points to 4.298%, while the benchmark 10-year yield added 2.6 basis points to 4.655%. Despite the rise in yields, the US Dollar Index edged marginally lower, falling 0.05% to 101.13 as traders balanced higher interest rate expectations against safe-haven demand elsewhere.
Energy markets remained the standout performers as the conflict between the US and Iran continued to intensify. Brent crude rose 2.97% to settle at US$93.71 a barrel, while WTI crude gained 2.95% to US$86.83, with both contracts reaching six-week highs. The gains came after further reports that commercial shipping had been forced to reroute away from the Red Sea following renewed threats from Houthi forces in Yemen, fuelling concerns over global oil supply.
Gold also extended its recent rally as investors sought the safety of precious metals. The metal climbed 1.30% to US$4,129.35 an ounce, reaching its highest level in two weeks as geopolitical uncertainty continued to support demand.
Gold Extends Rally as Haven Status Comes Back into Play
Gold has rallied nearly 5% over the past few days after threatening to break the annual low just under $3,950 an ounce. The world’s favourite precious metal has been trading strongly in line with the dollar over the last few months, but the last week has seen it revert to its more usual safe-haven status, and it has risen as geopolitical concerns have increased. The Dollar Index has risen nearly 1% over the same time frame, and the more recent correlation would have seen gold sink to fresh lows. This is a stark change from the pattern that we’ve seen through most of 2026, and traders are now looking to see if the haven correlation is back to stay or if we’ve just seen a bit of an anomaly over the last few days. The situation in the Middle East looks poised to jump one way or the other sharply in the coming days, so we should get confirmation on whether the fundamental relationship has moved back to its more normal status.
Busy Day Ahead for Traders
Attention now turns to a busy economic calendar that could provide fresh direction for markets. Australian employment data will be closely watched during the Asian session, with the market expecting a 16k increase in jobs in June and the unemployment rate to remain steady at 4.4%, before attention shifts to Europe, where the European Central Bank is widely expected to leave interest rates unchanged. However, President Christine Lagarde’s accompanying press conference will be scrutinised for any changes in the Bank’s outlook on inflation and the timing of future policy easing. In the United States, weekly unemployment claims (exp. 211k) will provide another snapshot of labour market conditions, while traders are expected to remain highly sensitive to any further developments in the Middle East, which continue to drive volatility across global financial markets.
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