Markets Search for Direction: Stocks Flat, Dollar Strengthens, Commodities Plunge
Wall Street opened February cautiously. Stocks fluctuated without a clear direction, after the market was shaken by the "breakup" of the precious metals rally. Pressure on gold and silver eased compared to the previous session, but risk-off sentiment persisted: oil fell, the dollar strengthened, and bond yields rose.
US stock indexes struggled to gather steam after Friday's extreme sell-off in precious metals. The S&P 500 fell slightly, while the US dollar strengthened against most major currencies. Gold pared losses but was still down around 3%, extending its biggest decline in more than a decade.
In energy markets, oil also came under pressure—down around 4.5%—after Donald Trump stated that Washington was in talks with Iran. This signal of de-escalation caused the "geopolitical risk premium" to evaporate, and the oil market immediately reset.
The background is that the gold-silver rally that exploded in January ran too fast. The impetus comes from a combination of geopolitical issues, concerns about currency depreciation, and the debate over central bank independence. When sentiment shifts, overly strong positions are unwound simultaneously—making the market suddenly volatile and difficult to stabilize in one breath.
The next focus for traders is the upcoming release of manufacturing data from the Institute for Supply Management (ISM), which is expected to show improvement in January. Furthermore, Raphael Bostic's speech will be closely monitored to gauge the tone of interest rate policy—whether the market should prepare for a "higher for longer" stance.
In early New York trading, the S&P 500 fell 0.1%, the Nasdaq 100 fell 0.1%, and the Dow Jones was virtually unchanged. In the bond market, the 10-year Treasury yield edged up to around 4.25%, the dollar rose around 0.2%, and Bitcoin gained around 2.4%—indicating continued rapid capital flows seeking safe havens and opportunities for a rebound.
Source: Newsmaker.id
