US markets mixed as Nasdaq leads, broader sentiment cautious

Asian Pacific stock indices were mixed overnight. The standout performer was the South Korean Kospi, which extended its post-election rally with another strong showing. 

Hong Kong’s Hang Seng and the Shanghai Composite were up 1.0% and 0.2% respectively, with the former benefiting from outsized gains across the tech sector. Chinese equities were also supported by a slightly better-than-expected private Services PMI reading. The Australian ASX 200 closed unchanged, while Japan’s Nikkei lost 0.5%.

European stock index futures were firmer across the board in early trade on Thursday. Equities got a lift from US stock index futures, which began to rally soon after the European open. The German DAX remains in focus after it traded at a fresh record intra-day high this morning.

Source: TN Trader

The gains came ahead of the conclusion to the European Central Bank’s (ECB) two-day monetary policy meeting. The ECB is expected to announce a 25-basis-point rate cut. Recent speculation suggests this may be the final reduction for the foreseeable future. Sentiment was also boosted by a bullish upgrade for Bayer from Goldman Sachs.

FX markets were relatively quiet overnight. The US dollar was a tad firmer in early trade, although the Dollar Index (DXY) continues to trade in a relatively narrow range, broadly moving sideways on either side of 98.50. The EUR/USD was also little-moved and just about holding above 1.1400 as traders awaited the ECB’s announcement.

Source: TN Trader

But the Japanese yen lost ground against most of its peers as risk appetite increased and as investors spurned safe-haven currencies, including the Swiss franc.

Gold drifted lower overnight, having failed to break back over $3,380 in a convincing fashion. But it managed to find buyers soon after the European open, adding to yesterday’s modest gains. 

Gold has been rangebound since early Tuesday morning, hovering between $3,340 and $3,380 for the most part. The weaker dollar has helped to support prices, and the chart looks quite constructive from a bullish perspective. 

The precious metal has risen steadily since mid-May when it dropped to $3,120, pulling back from its record high of $3,500 hit just three weeks previously. The daily MACD indicates some positive momentum as it pushes up from neutral levels. But there’s been quite a turnaround in risk appetite since April, when President Trump’s tariff announcement roiled stock markets.

Source: TN Trader

Investors seem more confident now, and that means less reason to load up on gold. Despite this, prices remain elevated, suggesting that at least some investors are hedging their bets.

Crude oil remains rangebound, with front-month WTI pulling back below resistance around $63 per barrel. Although Wednesday’s US inventory report showed a larger-than-expected draw in crude stocks, that bullish surprise was largely offset by builds in gasoline and distillate inventories.

Source: TN Trader

On the supply side, reports that Saudi Arabia intends to increase output added to the cautious tone. The market appears to be caught between supply optimism and demand scepticism, with no clear indications that a breakout may be imminent.

Natural Gas prices remained within their recent range but leaned slightly toward the bullish side. While trading activity was limited, price action continued to favour the long bias. With no major news or disruptions, gas markets stayed relatively calm, but the underlying tone suggests a preference to push higher should any catalyst emerge.

Cryptocurrency markets were little-changed this morning. Bitcoin continued to trade around $105,000, just above an area that acted as resistance over the first half of May. Ether was also relatively unmoved. It continues to consolidate, with the first significant area of support coming in around $2,500.

The CBOE Volatility Index (VIX) hovered either side of 20.00 today, indicating continued calm across US equity markets. While tariff headlines and data events remain potential triggers, the index’s steady reading suggests that investors are not yet pricing in a major volatility spike. 

With sentiment generally optimistic but cautious, the VIX continues to indicate underlying stability across the US stock market, for now.

The highlights of today’s economic calendar are the European Central Bank’s monetary policy decision and the release of US weekly Unemployment Claims. 

Later today, Broadcom will release its first quarter earnings report. The company is a tech sector bellwether that could help set the tone for sentiment heading into the end of the week.

The US is reportedly offering more flexible tariff terms to Japan, suggesting some easing of trade tensions in the region. At the same time, Citigroup is reportedly planning to slash 3,500 tech jobs in China, highlighting how trade friction is reshaping corporate strategies.

Domestically, President Trump announced a sweeping immigration policy move, banning citizens from 12 countries, including Iran and Libya, and suspending international student entry to Harvard.

Tech continues to be the dominant force in equity markets, with upside momentum building even as some names appear stretched. NVIDIA’s apparent relentless advance has helped prop up the NASDAQ while broader indices continue to grind higher.

The bulls are in control for now, but scepticism lingers beneath the surface. With US Payrolls on deck tomorrow, and as President Trump prepares to negotiate a trade deal with China’s President Xi, there are both opportunities and risks.