Wall Street posts strong gains led by technology

Technology lifts major indexes higher on Thursday.
The United States' tariffs on Chinese imports are expected to go into effect on Friday.
The FOMC minutes reaffirms plan for two more rate hikes.

Eren Sengezer FXStreet

Major equity indexes started the day higher on Thursday amid an improved market sentiment and extended their upside to end the day with meaningful gains. The CBOE Volatility Index (VIX), Wall Street's fear gauge, dropped more than 7% on the day.

The United States' tariffs on $34 billion worth of Chinese goods is scheduled to go into effect at 04:01 GMT on Friday. Although there were no fresh headlines suggesting an attempt to reach a last-minute deal to avoid a possible trade war, reports of the U.S. possibly backing away from tariffs on European cars were cheered by the participants.

"There's a lot of uncertainty, but the markets have reacted fairly calmly and rationally. There's been a lot of rhetoric but not a lot of actual action in terms of a trade war," Oliver Pursche, chief market strategist at Bruderman Asset Management in New York, told Reuters. The risk-sensitive technology sector outperformed other major indexes with the S&P 500 Information Technology Index (SPLRCT) adding 1.5% on the day.

In the second half of the session, the FOMC minutes reassured markets that the economy was in a very healthy state with a strong labor market and gradual rate hikes were appropriate. However, most Committee members reportedly voiced their concerns over the potential negative impact of the Trump administration's trade policy on the economy.

Today's data from the U.S. showed that activity in the service sector expanded at a robust pace in June with ISM and Markit PMI readings surpassing the market expectations. In the meantime, the ADP's monthly report showed that private payrolls rose less than expected from May to June.

The Dow Jones Industrial Average added 182.74 points, or 0.76%, to 24,357.56, the S&P 500 rose 23.51 points, or 0.87%, to 2,736.73 and the Nasdaq Composite gained 83.75 points, or 1.12%, to 7,586.43.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD sits near monthly high, around 0.7035 on hawkish RBA

AUD/USD trades around 0.7030-0.7035 in the Asian session on Thursday, near its monthly top, as recent hawkish comments from RBA officials continue to underpin the Australian Dollar. The US Dollar, meanwhile, struggles to lure buyers amid further declines in US bond yields, adding support to the pair. However, Fed rate-hike bets and geopolitical uncertainty help limit losses for the safe-haven buck, warranting caution for Aussie bulls.

USD/JPY remains confined in a familiar range; holds steady above 158.00

USD/JPY extends its consolidative price action through Thursday's Asian session, trading just above 158.00 amid diverging forces. Uncertainty over the timing of the next BoJ rate hike keeps Japanese Yen bulls on the defensive. The US Dollar, meanwhile, languishes near multi-week low amid declining US bond yields. Furthermore, looming intervention risks limit JPY losses and cap the pair. Traders also seem hesitant ahead of the Fed and BoJ meetings next week.

Gold hangs near one-week low; eyes $4,100 break amid Fed hike bets

Gold attracts fresh sellers in Thursday’s Asian session, sliding closer to a one-week low touched the previous day. Firming expectations for an imminent Fed rate hike, bolstered by oil-driven inflation risks, weigh on the non-yielding bullion. Meanwhile, declining US bond yields counter geopolitical uncertainty, keeping US Dollar bulls on the defensive. This helps XAU/USD defend $4,100.

Dogecoin Labs launches, resistance looms

Dogecoin (DOGE) Labs launched Wednesday in partnership with the Dogecoin Foundation, bringing together several product teams and technologies to expand the use of the memecoin (DOGE) across payments, decentralized finance (DeFi) and consumer applications. The launch will consolidate MyDoge, DogeOS and Such App under one business, led by Jordan Jefferson, founder of MyDoge and DogeOS.

What the midterm elections mean for Treasury yields, the Dollar and Gold

Democrats are priced to take the House, so November 3 comes down to the Senate and how much Washington can borrow without the other party. Treasury yields will show the answer first, then the Dollar and Gold. On November 3, Americans vote for all 435 House seats and 35 Senate seats. For bond prices, the result comes down to one thing: how much the government will borrow over the next two years.

The US Dollar fell. Gold didn't rally. That tells you everything

Gold (XAU/USD) is struggling to capitalize on a weaker US Dollar (USD), after repeatedly failing to establish itself above the $4,200 level. The precious metal remains confined to a relatively narrow trading range despite a combination of developments that would normally support higher prices.