Investor sentiment took a bullish turn this week as plummeting oil prices, triggered by Israel’s decision not to target Iranian oil facilities, calmed fears of an escalated Middle Eastern conflict. The S&P 500, Nasdaq 100, and Dow Jones Industrial Average all closed higher, with small-cap stocks leading the charge. However, rising Treasury yields and continued concerns about U.S. fiscal policy remain a potential drag on the market’s momentum.
Bitcoin price dropped on Thursday as weak risk appetite and anticipation of more interest rate cues dragged down the cryptocurrency market. The sell-off in major U.S. technology stocks, particularly Meta Platforms, Microsoft, and Alphabet, weighed heavily on Bitcoin, highlighting the renewed correlation between the two sectors. This trend had subsided earlier this year but has re-emerged as hype over spot exchange-traded funds waned and both sectors faced pressure from the prospect of higher U.S. interest rates. Fears of continued interest rate hikes also persisted, keeping a lid on most cryptocurrencies. Ethereum, Solana, and XRP all lost ground, while investors awaited further economic cues from upcoming data prints, including gross domestic product data and PCE price index data.
Asian markets are expected to open higher on Wednesday, tracking positive cues from Wall Street and other global markets. Investors are continuing to pour money into risky assets, boosting sentiment across the region. Key events on the economic calendar include interest rate announcements from Indonesia, trade data from Thailand and New Zealand, inflation figures from Japan and Australia, and a Bank of Japan policy meeting. The Japanese yen has remained relatively stable, with intervention from authorities yet to materialize. China’s yuan, on the other hand, continues to weaken against the dollar. Overall, the general outlook for Asian markets is positive, driven by improved global market conditions, strong earnings reports in the U.S., and a weaker dollar.
Asian markets are expected to open on a positive note on Wednesday as investors continue to favor risky assets. The main highlights of the day include Indonesia’s interest rate decision, Thailand and New Zealand’s trade figures, Japan’s service sector producer inflation data, and Australia’s consumer price inflation. While Japanese authorities have not yet intervened in the currency market, traders remain vigilant as the dollar approaches 155.00 yen. The Chinese yuan has also weakened, reaching a five-month low against the dollar. Indonesia’s central bank is widely expected to keep its interest rates unchanged, with a slight chance of a small hike. The overall sentiment across Asian markets is expected to be positive, driven by strong performances in global markets, lower bond yields, and a weaker dollar.
US stocks are anticipated to open higher on Monday following a period of steep declines. Easing tensions in the Middle East have alleviated risk aversion, while investors prepare for a busy week filled with key events, including earnings reports from major tech companies and the release of critical inflation data. However, Tesla shares have dropped due to price cuts in key markets.
