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US major indices experienced a recovery after earlier declines, with the S&P moving into positive territory even after falling 92 points earlier. The Dow industrial average rose by 263 points or 0.63%, having previously dropped 435 points.
The NASDAQ index remains down by about 120 points or 0.70%, yet this is an improvement from its lows of 468.62 points. Current US yields are near highs, with the two-year yield rising one basis point to 3.920%, while the ten-year yield remains unchanged at 4.255%.
Gold And Oil Prices Rebound
Gold prices increased by $38 or 1.24%, trading at $3122.85 after a low of $3076.98. Crude oil prices also rose by $2.17 to $71.53, marking a weekly increase of 3.16%, and achieving its fourth consecutive week of gains after reaching a low of $65.22.
The USDJPY currency pair is also up, supported by rising yields and improved market sentiment. The price moved above its 200-hour moving average at 149.848 and is now testing the 100-hour moving average of 150.215, aiming for a swing low target of 150.35. Buyers have shown support near the swing area between 148.56 and 148.724.
This recovery across US indices points to a market unwilling to capitulate even after sharp intraday declines. What we’re seeing is a short-term willingness by equity participants to step back in once deep pullbacks occur. The S&P, having reversed a near 100-point fall, ended modestly higher—a move that suggests underlying risk appetite remains, although confidence is cautious. The Dow’s advance, after dropping over 400 points, reinforces that view. Momentum, at least for now, isn’t entirely one-directional.
For traders in derivatives, especially those with exposure to index-linked contracts, this bounce may affect short-dated premium pricing. Implied volatility may not yet justify heavy directional exposure—unless additional catalysts emerge. On the Nasdaq side, declines were trimmed but still visible. Risk remains skewed towards correction in high-beta sectors, some of which have started to retrace sharply.
Fixed Income Market Stability
Fixed income paints a relatively stable picture. The two-year yield nudged higher, reflecting market expectations for short-term rate sensitivity. But with the ten-year standing pat, there’s little urgency to position aggressively for long-duration rate moves. The yield curve remains stubbornly flat at this point, so duration bets may not offer much in the way of near-term return adjustment. What matters now is whether rate markets begin to interpret mixed economic signals with more clarity—something they’ve struggled to do in recent weeks.
Gold’s movement higher is textbook positioning amid persistent inflationary whispers and geopolitical positioning. Its $38 rally from intraday lows suggests that traders who were sidelined are gradually returning, perhaps defensive in nature but nonetheless a firm presence. That said, bullion’s strength may also reflect softness in real yields, even if nominal rates stay pinned. This raises the possibility of asset allocation shifts away from risk for protection plays.
Oil’s advance—a fourth week in a row—is becoming harder to ignore. Crude climbed over $2 today, reinforcing a fundamental tightening story. With prices now cleanly above $71 and well off earlier lows, supply-side dynamics could begin to feed into longer-dated inflation expectations. We should be watching for moves in energy-linked options trading. If the upward tilt continues, margin dealers may need to re-hedge exposures built around a more neutral pricing scenario.
USDJPY’s journey back through technical levels tells us that participants are tracking yield differentials closely. Today’s move above the 200-hour average and the apparent test of the 100-hour line gives momentum traders a reason to stay engaged. Those swing lows, previously acting as support around 150.35, are being reexamined with a blend of fresh buying and position unwinding. Interest seems sustained, at least while bond yields are this sticky near local highs.
The zone between 148.56 and 148.724, which previously acted as a broader support band, isn’t just incidental—buyers reacted firmly there, suggesting these areas are being watched closely. For derivative participants, this can influence how short-term delta hedges evolve. Rapid snaps through those levels could increase gamma risk for option desk managers, particularly if volumes remain elevated into option expiry days ahead.
Vol skew, especially in yen-USD structures, might begin to reprice if the currency pair holds above moving averages into next week. We, too, are factoring reactions in bond auction results and central bank remarks, where forward guidance remains the key discounting mechanism.
What’s notable is the mix of moves—equities finding a bid, metals seeing support, oil rallying further—all of which suggest careful repositioning rather than a wholesale shift in direction. That creates opportunity for those structuring spread trades or calendar positions. We’ve already begun assessing where asymmetry in the short-end might be underestimated by the broader market.
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