US stock indices S&P 500 and Nasdaq poised to hit new record highs despite high bond yields

Futures on the S&P 500 and the tech-heavy Nasdaq 100 resumed gains, pushing close to fresh all-time highs. Investor sentiment is being fueled by strong corporate earnings and massive capital flows into AI-related projects. Robust fundamentals are allowing stocks to shrug off tight conditions in the bond market and sustain a bullish impulse.

BNP Paribas Wealth Management notes that the current rally is backed by real profit growth at issuers rather than inflated multiples. Upward revisions to corporate forecasts provide Wall Street with a solid cushion ahead of the release of the Fed meeting minutes. More details via the link.

Brent oil dipping below $100/bbl eases inflation fears and supports global markets

Brent crude fell below the psychological $100-per-barrel level, providing additional support for risk assets. The drop in commodity prices was driven by increased exports from Persian Gulf producers, Saudi Aramco's lower official selling prices for Asia, and a G7 decision to release part of strategic oil reserves.

Easing energy price pressure reduces the risk that the Fed will need to tighten policy more aggressively than currently priced. Against this backdrop, the Stoxx 600 rose about 0.7%, and US Treasury yields stabilized near local highs. For traders looking to play oil and FX volatility, trading instruments are available on InstaTrade. More details via the link.

Record US Treasury yields crush gold despite geopolitical risks

The precious metals market finished the trading week deep in the red: spot gold plunged 3.09% to $4,140.52/oz, and silver fell to $60.18. The main driver of the sell-off was not geopolitics but a record jump in the 10-year US Treasury yield, which reached its highest level since 2002 at 5.342%. When risk-free government bonds offer such attractive yields and the dollar is strong, holding non-yielding bullion becomes unattractive for many investors.

A brief floor under prices came from a shockingly weak US nonfarm payrolls report (just 29,000 new jobs and unemployment rising to 4.2%), which momentarily pushed gold up toward $4,200 on hopes the Federal Reserve might soften its stance. However, that bullish impulse quickly evaporated under pressure from the bond market. Now the only things keeping a deeper rout at bay are ongoing central bank buying of physical bars and baseline safe-haven demand amid Middle East tensions. More details via the link.