US Dollar Exhibits Divergent Trends Across Major Currencies
On September 8, the US dollar remained largely flat against the euro, pound, Australian dollar, and Swiss franc, while showing modest strength versus the New Zealand dollar. The greenback weakened slightly against the Japanese yen and Canadian dollar. Market participants maintained a cautious stance ahead of critical US inflation readings — the Producer Price Index (PPI) on Thursday and the Consumer Price Index (CPI) on Friday — which are expected to influence the Federal Reserve’s monetary policy outlook.
Broad Uptick in US Treasury Yields Reflects Market Caution
Yields on US Treasury securities rose across the curve, with short-dated maturities seeing the most pronounced increases, signaling investors’ cautious sentiment ahead of inflation data releases. By market close:
- The 2-year Treasury yield rose 1.7 basis points to 4.3957%
- The 5-year yield increased by 1.6 basis points to 4.5662%
- The 10-year yield ticked up 0.8 basis points to 4.7922%
- The 30-year yield gained 0.2 basis points to 5.2475%
Market consensus suggests that any upside surprise in PPI or CPI figures may limit the Fed’s ability to ease monetary policy, whereas softer inflation readings could provide more latitude for adjustment.
US Equities Close Lower as Dow Leads Declines
Wall Street’s major indexes closed down, with the Dow Jones Industrial Average experiencing the steepest fall, dropping 628.04 points or 1.18% to finish at 52,791.29. The S&P 500 declined by 0.58%, while the Nasdaq Composite shed 0.32%. The small-cap Russell 2000 also slipped 0.52%.
The Dow showed considerable dispersion, with 24 components in negative territory. Amgen stood out as the biggest drag, tumbling more than 10% to $393.17, following news that Novartis failed a Phase 3 trial for its cardiovascular drug pelacarsen. This development raised concerns about Amgen’s similar drug olpasiran. In response, BMO Capital downgraded Amgen from "Outperform" to "Market Perform," amplifying selling pressure.
Other notable decliners included Salesforce, Home Depot, Sherwin-Williams, Johnson & Johnson, and Nvidia. On the upside, Caterpillar, UnitedHealth, and Chevron rose by over 1%, 0.9%, and 0.67%, respectively, buoyed by higher oil prices.
Oil Prices Fluctuate Amid Heightened Geopolitical Tensions
Crude oil prices experienced sharp swings, reaching an intraday high of $94.72 before retreating to $91.82, near the 100-hour moving average, which provided support. Prices later rebounded to around $94.03. Technically, the failure to break below the key moving average attracted buyers and capped downside.
The market remains sensitive to escalating geopolitical risks in the Middle East. Saudi Arabia suffered coordinated missile and drone attacks by Houthi forces across multiple locations, resulting in 73 injuries and damage to infrastructure. Riyadh has vowed a strong response, heightening concerns about supply disruptions. Concurrently, flights were suspended at Jeddah airport, intensifying worries over transportation and logistics.
Additionally, multiple explosions occurred on Iran’s critical oil export platform, Jargh Island, which handles the bulk of the nation’s crude shipments. The causes remain unclear but cast a shadow over global oil supply stability.
Gold Prices Slide Below Key Technical Support
Spot gold declined 1.55% to close at $1,359.89 per ounce, slipping beneath the 100-day moving average at $1,354.86. Technically, sustained trading below this level suggests short-term bearish momentum could prevail, with the potential for further declines. Conversely, a rebound above the moving average might restore buying interest.
Investors Focused on Upcoming US Inflation Reports
Market participants are awaiting the release of the US PPI on Thursday at 8:30 a.m. ET, followed by the CPI data on Friday. With directionless trading prevailing, many investors are adopting a wait-and-see approach, seeking clearer signals on the Fed’s next steps and prospective asset price movements. Meanwhile, Middle Eastern geopolitical tensions continue to inject volatility into oil markets, whereas the trajectories of the dollar, equities, and gold remain closely tied to the forthcoming inflation statistics.