Why do interest rates move markets?This Thursday, the European Central Bank meets to decide whether to raise interest rates or not. Markets are watching closely — and for good reason. Interest rate decisions are one of the most powerful drivers of price action across currencies, stocks, and commodities. But what exactly is happening, and why does it move markets so much?
Here is a short overview, using this week's ECB decision as a live example.
What is an interest rate decision?
Central banks like the ECB set a benchmark interest rate that influences the cost of borrowing across the entire economy. When rates go up, borrowing becomes more expensive for businesses and consumers. When rates go down, borrowing becomes cheaper and easier.
The ECB meets eight times a year to decide whether to raise, cut, or hold its rate. Each decision is followed by a press conference where the ECB president explains the reasoning — and that press conference often moves markets more than the decision itself.
Why do central banks raise rates?
The ECB's primary job is to keep inflation close to 2%. When inflation runs above that level, the ECB raises rates to cool down the economy — making it more expensive to borrow and spend, which gradually reduces price pressures.
Eurozone inflation hit 3.3% in August, driven largely by rising energy prices linked to ongoing instability in the Middle East. That is well above the 2% target, which is why markets are currently pricing in a 25 basis point rate hike this Thursday, which could bring the ECB's deposit rate to 2.50%.
How do rate decisions affect markets?
Three main asset classes react to rate decisions.
Currencies are the most immediate mover. When a central bank raises rates, its currency tends to strengthen because higher rates attract foreign capital seeking better returns. A hike from the ECB on Thursday would likely push the euro higher against the dollar and other major currencies.
Stocks tend to react negatively to rate hikes, particularly growth stocks and sectors with high debt levels. Higher rates increase borrowing costs for companies and reduce the present value of future earnings — both of which pressure valuations.
Bonds typically move in the opposite direction to rates. When rates rise, existing bond prices may fall because newer bonds offer better returns. Traders in government bonds will be watching Thursday's decision very carefully.
What traders watch beyond the decision itself
The rate decision is just one number. What matters almost as much is what ECB President Christine Lagarde says at the press conference that follows. Traders will be listening for signals about what comes next — whether Thursday's hike is a one-off or the start of a new tightening cycle, and how the ECB views the inflation outlook for the rest of 2026.
A hawkish tone — may suggest that more hikes are coming — which could push the euro higher and weigh on European equities. A more cautious tone, even alongside a hike, could see markets rally in relief.
The bottom line
Interest rate decisions do not just affect borrowing costs. They ripple across currencies, stocks, and bonds simultaneously. Understanding what a central bank is trying to achieve — and reading between the lines of what it says — is one of the most valuable skills a trader can develop.
This Thursday is a good opportunity to watch it in real time.
Disclaimer: This article is provided for general informational and educational purposes only and should not be considered investment advice or a recommendation to trade. The content is prepared without regard to individual investment objectives or financial situations and may not meet standards for independent research. Past performance is not indicative of future results
What does an Earnings Report actually tell you?Next week Nvidia reports earnings after the US market closes. For many traders it will be the most watched event of the month. But what exactly are they watching — and why does it matter so much?
Here is a short guide to reading an earnings report, using Nvidia as a live example.
What is an earnings report?
Every quarter, publicly listed companies are required to report their financial results. The report covers how much money the company made, how much it spent, and what it expects to happen next. For traders, earnings season is one of the most active periods of the year because results often move stock prices significantly in a single session.
Why Nvidia's earnings matter beyond Nvidia
Nvidia is not just a stock. It has become a barometer for the entire AI trade. Historically,When Nvidia beats and guides higher, the whole tech sector tends to react — semiconductors, cloud companies, and AI software names all usually react to Nvidia. When it disappoints, the effect may ripple across the Nasdaq.
Next week after the close, traders will be looking at the revenue number, the data center segment, the gross margin, and the guidance. Those four things will provide valuable information.
The headline number: revenue
Revenue is the total amount of money a company brought in during the quarter. For Nvidia's upcoming report, analysts are expecting revenue of around $93 to $95 billion, representing growth of more than 100% compared to the same quarter last year. That is an extraordinary number — but what matters is not just whether Nvidia hits it, but whether it beats it and by how much. A company that meets expectations exactly often sees its stock fall. The market prices in optimism in advance, so traders need a genuine surprise
Where the money comes from: segment breakdown
Most large companies split their revenue into segments. For Nvidia, the one that matters most is data center — the chips that power AI infrastructure. In the previous quarter, data center revenue reached $75 billion, up 92% year on year. Next week's report will show whether that growth is continuing, accelerating, or beginning to slow.
Gaming, Nvidia's second largest segment, is watched as a secondary indicator of consumer demand for high-end graphics cards.
Margins: how much profit the company keeps
A company can have enormous revenue and still be unprofitable if its costs are too high. Gross margin — the percentage of revenue left after production costs — tells you how efficiently the business is running. Nvidia's gross margin has been running around 72 to 75%, which is exceptionally high for a hardware company and one of the reasons the stock commands such a premium valuation.
Guidance: what traders are looking for
Perhaps the most important part of any earnings report is not what happened last quarter — it is what the company says will happen next quarter. This forward guidance is what traders are really waiting for.
Investors often pay close attention to Nvidia's revenue guidance, as it can influence market sentiment following the earnings release. Historically, guidance that exceeded prevailing analyst expectations has sometimes been followed by a positive share price reaction, while guidance below expectations has, in some cases, been met with a weaker market response. Last quarter, Nvidia projected $54 billion in revenue for the current quarter, exceeding analyst expectations at the time. The company's updated guidance next week is likely to be one of several factors that market participants consider when assessing Nvidia's outlook.
Disclaimer: This article is provided for general informational and educational purposes only and should not be considered investment advice or a recommendation to trade. The content is prepared without regard to individual investment objectives or financial situations and may not meet standards for independent research. Past performance is not indicative of future results
Education
Wall Street Reports Tomorrow. Tomorrow is the biggest single day of the earnings calendar so far this year. JPMorgan, Bank of America, Citigroup and Wells Fargo all report before the US market opens on Tuesday July 14, followed by Goldman Sachs, Morgan Stanley and BlackRock on Wednesday. Five banks valued at nearly $2 trillion releasing results in one morning.
The numbers are expected to be strong. Total Q2 earnings for the sector are forecast to grow around 10% year over year on similar revenue growth, driven by resilient consumer spending, steady loan demand, and a robust first half for investment banking. JPMorgan's revenue is projected to reach $51.3 billion, up 14% year over year. Bank of America is expected to post $30.7 billion, up 16%. Goldman Sachs is forecast to deliver EPS of around $14.47, up more than 32% year over year, fueled by blockbuster trading and M&A advisory activity. Investment banking revenue across the industry jumped 24% in the first half of 2026 to $61.4 billion.
But the bar is high
Strong expectations cut both ways. When five of the world's biggest banks report on the same morning as the June CPI print, the room for disappointment is significant. Options markets are already pricing in meaningful moves: Goldman Sachs is showing a 6% implied move, Citigroup and Wells Fargo 5.5% each, Bank of America 4.5%, and JPMorgan 4.4%. These are not small numbers for large-cap stocks.
Key metrics traders are likely to watch.
Beyond the headline EPS, the metric that matters most this week is net interest margin — the spread between what banks earn on loans versus what they pay on deposits. With the Fed on hold and a rate hike now more likely than a cut before year-end, NIM trends will determine whether banks can sustain profitability into the second half.
Credit quality is the second potential point of interest. Any sign of rising delinquencies, particularly on credit cards or commercial real estate, could overshadow even a strong earnings beat.
A closer look at Citigroup
The most watched name this week may not be JPMorgan. Citigroup has been quietly turning itself around, posting its best quarterly revenue in a decade in Q1 2026, with net income of $5.8 billion and EPS of $3.06. If that momentum continues into Q2, it could be the surprise of the week.
What this means for markets
Bank earnings have a way of setting the tone for the whole season. A strong showing from the big lenders, combined with reassuring commentary on loan demand and credit quality, would signal that the broader economy remains in good shape despite elevated oil prices and Fed hawkishness. A disappointment could be the catalyst that finally tests the S&P 500's recent highs. Nevertheless, the market reaction will also depend on broader macroeconomic data and investor expectations.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade. 49% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results. SpaceX nailed its debut. Now OpenAI is nextLast week we asked whether the SpaceX IPO would add fuel to the AI rally or mark its top. We have a first answer.
SPCX opened at $150 on Friday, closed at $160.95, up 19% from the $135 offer price, and peaked at $176.52 intraday — a gain of nearly 31% from the offering price. On its first day of trading, SpaceX became one of the world's biggest listed companies, valued above $2 trillion. By any measure, the debut was a success.
But the more interesting story is what comes next.
The IPO queue just got longer
OpenAI filed a confidential S-1 registration statement with the SEC on June 8, targeting a public listing as early as September 2026 at a valuation of roughly $1 trillion, with Goldman Sachs and Morgan Stanley managing the offering. And it is not alone. Rival Anthropic submitted its own confidential IPO prospectus just one week earlier, at a valuation of $965 billion.
In the space of a single week, three of the most closely watched private companies in the world either listed or filed for listing. The AI IPO supercycle is no longer a theory. It is happening.
The valuation question
SpaceX's strong debut will encourage OpenAI and Anthropic. But the numbers deserve scrutiny. OpenAI lost approximately $1.22 for every dollar it earned last quarter. Its projected cash burn for 2026 sits at roughly $27 billion.These are not small numbers, and public market investors will apply a different level of scrutiny than private funding rounds typically require.
Anthropic is in a slightly different position. The company is projecting its first ever profitable quarter in Q2 2026, with $559 million in operating income — a milestone that OpenAI has not yet reached and one that could matter a great deal when both companies are competing for the same investor dollars later this year.
What this means for the Nasdaq
The Nasdaq will be one of the key indices to watch through all of this. A successful SpaceX debut lifts sentiment. If the OpenAI roadshow gains traction later in the year, it could add further momentum. But absorbing multiple trillion-dollar offerings in a single year is unprecedented, and at some point the market will ask where the money comes from.
The key level to watch on the Nasdaq is 29,000. A hold above that level would keep near-term momentum positive, while a break below could signal a more cautious picture heading into the second half of the year
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade. 70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results.
SpaceX goes public this FridayThis Friday, June 12, SpaceX is set to begin trading on the Nasdaq under the ticker SPCX. It is targeting a valuation of $1.75 trillion and aims to raise $75 billion, which would make it the largest IPO in stock market history by a wide margin, more than double the previous record set by Saudi Aramco in 2019.
The roadshow launched on June 4, and by all accounts demand has been strong. Pricing is expected on June 11, the day before trading begins.
What is actually being valued here
SpaceX is not just a rocket company. The real story is Starlink, its satellite internet division, which accounts for roughly 79% of total projected revenue in 2026 and is the only part of the business currently turning a consistent profit. Starlink crossed 10 million subscribers earlier this year and generates around $810 million per month in subscription revenue alone. That is the engine behind the valuation, and it is reportedly why investor appetite has been so strong.
The rest of the business, including launch services, xAI, and future Mars missions, is still loss-making. xAI alone is projected to burn through $10 billion in 2026.
The valuation debate
Not everyone is convinced by the $1.75 trillion price tag. Morningstar, one of the few independent research firms to publish a formal valuation ahead of the listing, puts fair value at $780 billion, less than half the IPO target, and recommends long-term investors wait for more attractive entry prices after the debut. At the targeted valuation, SPCX would trade at roughly 94 times its 2025 revenue, a multiple that leaves very little room for error.
What this means for markets
Even for traders who cannot access SPCX directly, this IPO matters. A strong debut would add fuel to the broader tech and AI rally that has driven markets to record highs this year. A weak open or disappointing first-day performance could dent sentiment across the Nasdaq at a time when rate fears are already creating some turbulence.
The spotlight on Friday will fall not only on SPCX but on the Nasdaq itself.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade. 70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results.
Oil's big pullback. One strait decides what's next.Brent crude has had a volatile few weeks. After spiking to multi-year highs above $130 in April as the Strait of Hormuz came under threat, prices have since retreated sharply, falling more than 17% over the past month as traders priced in growing optimism around a US-Iran peace deal. That optimism briefly pushed Brent below the $100 level, a psychologically significant threshold that the market had been watching closely.
But the selloff may have run ahead of the fundamentals.
This week, prices snapped back. Iranian media reported that Tehran had suspended communications with Washington following Israeli strikes in Lebanon, and that Iran along with regional allies was actively considering a full closure of both the Strait of Hormuz and the Bab el-Mandeb Strait, a key alternative shipping route. Oil traders took note immediately.
What the chart is telling us
The daily chart shows a clear structure. Brent put in a sharp peak above $130 in early April, followed by an extended corrective move lower. The $100 level, previously strong resistance, has now been tested as support and price has bounced from that zone. The 50-period moving average on the daily chart is still pointing lower, reflecting the broader pullback, but price action near $95 is starting to coil.
On the shorter timeframe, the hourly chart shows indecision. Price has been oscillating in a range roughly between $92 and $98, with neither bulls nor bears in full control. That kind of consolidation after a sharp move lower can resolve in either direction, and the trigger is unlikely to come from the chart itself.
The levels to watch
To the upside, $100 is the key level. A decisive reclaim of that level, particularly on a daily close, would signal that the corrective move is over and bring the April highs back into focus. Above $100, there is relatively little resistance until the $110-$115 zone.
To the downside, $90 is the next meaningful area. A break below that level on meaningful volume would suggest the corrective move has further to run, and could open the door toward $82-$85, where longer-term moving averages begin to converge.
The macro driver remains geopolitical
No technical level will matter more than what happens in the Strait of Hormuz over the coming days. A credible peace deal would likely push Brent lower quickly. A breakdown in talks, or any escalation that threatens supply routes, would likely see $100 reclaimed fast. Traders should be watching diplomatic headlines alongside price action this week.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade. 70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results.
SpaceX is going public. Watch Tesla.On May 20, SpaceX filed its S-1 prospectus with the SEC, officially confirming what markets had been anticipating for months. The world's most valuable private company is going public. The roadshow opens June 8, pricing is set for June 11, and trading on Nasdaq under the ticker SPCX begins June 12. The targeted valuation sits between $1.75 trillion and $2 trillion, and the deal is expected to raise up to $75 billion — more than double the previous record set by Saudi Aramco in 2019.
SPCX does not yet have a chart. But Tesla does. And right now, Tesla may be the most useful lens through which to read what markets are thinking about the SpaceX listing.
The relationship between the two companies is not straightforward, but it is well established. Both are led by Elon Musk. Both compete for the same pool of growth-oriented capital.
Historically, major SpaceX milestones have tended to coincide with periods of underperformance in Tesla shares, as attention and capital rotate between the two. The April 1 confidential filing, the May 20 S-1 release — Tesla declined around both. The average return across major SpaceX IPO-related announcements has been negative for TSLA. Whether the June 12 listing follows the same pattern is one of the most interesting questions in markets right now.
What SpaceX actually is
SpaceX designs, manufactures and launches rockets and spacecraft. Its Falcon 9 rocket has become the workhorse of the commercial launch industry. Its Starlink satellite internet service serves millions of customers globally and is the primary revenue driver. Revenue for 2025 came in at $18.7 billion, with a net loss of $4.9 billion, largely driven by Starship research and development costs. Year on year revenue growth was 16%, while expenses grew 64% reflecting the scale of investment being made in next-generation programmes.
At $1.75 trillion, SpaceX would list as the third largest company in the world by market cap, behind only Apple and Nvidia. At roughly 110 times trailing revenue, it is one of the most contested valuations on Wall Street. Bulls point to Starlink's recurring revenue and Starship's transformational potential. Sceptics point to the net losses, the expense growth, and the fact that Elon Musk retains 85% of voting power.
What the Tesla chart shows
Tesla has recovered strongly from its March lows alongside the broader market. The stock is currently trading above its 200-day moving average, which had been acting as resistance for much of the first quarter. That is a constructive technical picture, but the June 12 date introduces a specific, event-driven risk that the chart alone cannot price.
The 200-day moving average sits below current price and has historically acted as a reference point during pullbacks. The recent highs represent a level where price has previously stalled. How Tesla behaves around these levels in the weeks leading up to the June 12 listing may offer insight into broader market sentiment, though past patterns are not a reliable guide to future price movements.
Two scenarios around June 12
Market participants may closely monitor Tesla shares around SPCX’s expected listing date. If investor demand for SPCX is strong, some short-term capital flows could shift toward the new listing. Conversely, weaker-than-expected demand for SPCX could influence sentiment across related equities, including Tesla. However, market reactions remain uncertain and may be influenced by broader market conditions and investor sentiment.
Three weeks remain before June 12. The chart levels are clear. The catalyst is known. What happens between now and then will be worth watching closely.
This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade.70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results
Nvidia reports on Wednesday. The bar has never been higher.Nvidia reports its first quarter earnings after the US market close on Wednesday, May 20. The number Wall Street is watching is $78 billion in revenue — a figure that would represent roughly 77% growth year on year. Buy-side whispers run higher, with some desks modelling closer to $80 billion, and guidance for the second quarter is expected somewhere between $85 and $90 billion. A beat alone is already in the price. The question is by how much.
The backdrop going into this report is as supportive as it has been in years. Microsoft has committed $190 billion in capital expenditure for 2026. Amazon is spending roughly $200 billion. Alphabet has signalled that its already elevated spending will accelerate further in 2027. All of that spend flows, in large part, through Nvidia's chips. AMD's data centre revenue soared 57% year on year in its most recent quarter, and Intel beat on revenue — both results pointing to sustained, broad-based demand across the AI chip market.
Nvidia pulled back 4.42% on Friday to $225.32, but the weekend brought fresh catalysts. CEO Jensen Huang joined President Trump's delegation to Beijing for the China summit, sparking optimism about semiconductor sales in China — one of the key risk factors heading into Wednesday. Bank of America raised its price target to $320 over the weekend, and the stock's market cap briefly touched $5.5 trillion. The Friday pullback now looks like a brief pause rather than a change in direction.
The analyst consensus sits at a price target of $269, with 57 Buy ratings, 2 Hold ratings and 1 Sell rating across the coverage list. Analyst sentiment heading into Wednesday's report remains broadly positive, though past ratings are not a guarantee of future performance.
But history offers a warning.
Nvidia stock has declined on the day of the earnings release in three of its last four quarterly reports, even though every single one was a beat. The Q4 report in February delivered a 7% beat on earnings per share, and the stock still fell 6% that day. A market that has already priced in perfection leaves very little room for anything short of it.
The three numbers that will likely decide the stock's direction are gross margin, the second quarter revenue guidance, and the commentary on China. The headline earnings number matters less than what management says about where things go from here.
Two scenarios for Wednesday:
If Nvidia clears the $80 billion whisper number and guides above $87 billion for the second quarter, the stock may extend its recent gains and push toward the analyst consensus around $269. The AI infrastructure story remains intact and investors may have fresh reason to add.
If results meet but do not clearly beat the whisper, or if guidance disappoints, the stock could pull back sharply from current levels toward the $200 area. The pattern of selling strong beats is well established and traders will be watching for it.
Earnings seasons always bring uncertainty. This one, for the world's largest company by market cap, may bring more than most.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade.70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results
Oil and the Iran deal: what a resolution could mean for marketsFor months, the Strait of Hormuz has been the single most important variable in global markets. It has driven oil above $100 per barrel, pushed inflation higher, reshaped rate expectations, and sent equity markets on a series of sharp moves in both directions. This week, that variable may finally be resolved.
Reports emerged last week that the US and Iran are close to a memorandum of understanding that could end the conflict. The framework, as described by multiple outlets, would involve Iran committing to a moratorium on nuclear enrichment while the US would lift sanctions and release frozen funds. Critically, it would reopen the Strait of Hormuz to commercial shipping.
The market's reaction to those reports gave a clear indication of what a deal could mean. When the news broke, Brent crude fell as much as 11% and US crude dropped as much as 15% in a single session, while the S&P 500 and Nasdaq both closed at record highs. That kind of price movement, in both directions simultaneously, shows just how much of the current risk premium in oil and the discount in equities is tied to this one conflict.
The situation remains fragile. A senior Iranian official appeared to rebuff the US proposal, stating that the US must pay reparations for damage done to Iran before any deal could be agreed. Talks have not broken down, but they have not concluded either. The US-China summit on May 14 and 15, which both sides appear to be treating as an informal deadline for progress, adds further urgency to the timeline.
What the chart shows
Oil has pulled back from its highs in recent sessions as deal hopes have grown, but it remains elevated. Brent is trading around the $100 level, which has now become the key psychological and technical reference point. A confirmed deal and reopening of the strait could see oil move sharply lower from current levels, unwinding much of the conflict-driven risk premium that has built up since late February. A breakdown in talks, on the other hand, could see the market retest the highs seen earlier in the conflict.
The 50-day moving average, which has been playing catch-up to the rapid price increase, now sits well below current levels. The 200-day moving average remains even further below, reflecting just how far and how fast this market has moved.
If a deal is announced ahead of or during the China summit, oil could fall sharply and equities may extend their recent gains. The scale of any move would depend on the specifics, particularly whether the strait reopens immediately or on a phased basis.
If talks stall or break down, oil may push back toward the $110 to $115 area. The market has shown that it can reverse quickly when geopolitical headlines shift, and any sign of renewed escalation would likely be reflected in prices within hours.
This week may provide more clarity on the conflict than any other point since it began. The chart levels are clear. The catalyst is known. What remains uncertain is the outcome.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade.70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results
Nvidia Is at a $5 trillion crossroads. What happens next?Nvidia has done something that very few companies in history have managed. It reached a market cap of $5 trillion in April, recovered from a geopolitical selloff that hit nearly every major stock, and is now sitting at record highs with its next earnings report just over two weeks away. The question the chart is now asking is simple: can it hold here?
The numbers behind the move are not in dispute. Last quarter, revenue hit a record $68 billion, up 73% year on year. The company guided for roughly $78 billion in the current quarter, and that figure excludes any revenue from China. The hyperscalers — Microsoft, Meta, Alphabet, Amazon — are spending more on AI infrastructure, not less. Every major earnings call this season has confirmed that the AI buildout is accelerating, and Nvidia remains the primary beneficiary.
The next earnings release is scheduled for May 20, providing a clear near-term catalyst. That date is now shaping how traders are positioning. The question many traders appear to be asking is whether the results will be strong enough to justify the current price and whether the stock could move meaningfully higher as a result. Expectations heading into earnings are elevated, though outcomes remain uncertain.
What the chart shows
Nvidia spent much of the first quarter of 2026 under pressure. The Iran conflict, rising oil prices and inflation concerns weighed on growth stocks broadly, and Nvidia was not immune. The stock traded sideways for months despite consistently strong results. Then April arrived. As ceasefire hopes emerged and the broader market rallied sharply, Nvidia led the recovery, posting gains well ahead of the index and reclaiming record territory.
The stock is now trading above both its 50 and 200-day moving averages, which have both turned back upward. That is a constructive technical picture. The key level to watch on the upside is the area just above current highs, where price discovery becomes more uncertain. To the downside, the 50-day moving average would be the first meaningful support if the market pulls back into the May 20 earnings date.
Two scenarios heading into earnings
If Nvidia reports revenue growth above 80% and provides strong forward guidance, the stock may extend its gains and attempt to build on current levels. The AI spending narrative remains intact, and any upside surprise could draw renewed momentum.
If the results meet but do not meaningfully exceed expectations, or if guidance comes in cautiously given China headwinds, the stock could consolidate or pull back toward support. A market that has already priced in a strong quarter leaves less room for positive surprise.
May 20 is the date. Between now and then, the chart tells you where the levels are.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade.70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results
Oil Surges as the Strait of Hormuz becomes a blockadeThe Strait of Hormuz just became something more than a conflict zone. Over the weekend, US-Iran peace talks in Pakistan collapsed without a deal, and President Trump responded by announcing a formal naval blockade of Iranian ports. Brent crude surged more than 7% on the news, trading back above $100 per barrel this morning. The relief rally of the past two weeks has been fully unwound.
This is a meaningful escalation. A ceasefire is one thing. A naval blockade is another. The market had spent the better part of last week pricing in de-escalation and that trade is now being forcibly reversed.
The supply picture is stark. The Strait of Hormuz has been largely closed since late February. Around 20% of global seaborne oil passes through it. JPMorgan noted over the weekend that pre-closure barrels are expected to be fully exhausted from the global supply chain around April 20, which is days away. The buffer that has been keeping the market from a more severe spike is running out.
Saudi Arabia has moved to partially offset the disruption by restoring capacity on its East-West pipeline, which can move oil to the Red Sea without passing through the strait. It helps at the margin, but it does not come close to replacing what the strait normally carries.
What the chart shows
Oil's price action this year has been defined by sharp moves in both directions, driven entirely by geopolitical headlines. The move higher this morning takes Brent back into territory it briefly visited in late March before the ceasefire talk pulled it back. The 50-day moving average, which had been catching up to price during last week's pullback, now sits well below current levels again.
The key level to watch on the upside is the $110 to $115 area, where price stalled previously and where sellers may look to re-engage. To the downside, $100 is the psychological level. A sustained hold above it keeps the bullish structure intact, while a move back below could signal the market is treating the blockade as a negotiating tactic rather than a durable supply disruption.
Two scenarios
If the blockade holds and no diplomatic progress emerges this week, oil may continue to push toward the $110 to $115 area. The April 20 timeline, when pre-closure supply is expected to run dry, could act as a catalyst for further moves.
If talks resume and progress is made, oil could reverse sharply. The market has shown it can give back gains quickly when headlines shift, as last week demonstrated. Volatility in either direction is likely to remain elevated.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade.70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results
The S&P 500's best week in months. Now what?After five consecutive weeks of losses, US equities staged a sharp recovery last week. The S&P 500 posted its strongest weekly gain since May, bouncing from the low 6,300s back toward the 6,500–6,600 area. For a market that had been grinding lower since the start of the Iran conflict, it was a meaningful shift in tone, but not necessarily a clean all-clear.
The bounce was partly driven by better-than-expected economic data and some tentative signs that a diplomatic framework around the Strait of Hormuz may be taking shape. Those signals were enough to bring buyers back in. But the chart tells a more complicated story.
What the chart shows
The S&P 500 is currently trading below both its 50-day and 200-day moving averages. That matters. Both levels — sitting around 6,790 and 6,640 respectively — now act as overhead resistance rather than support. A market that bounces but can't reclaim its key moving averages is not yet a market that has fully repaired the damage done.
The rally also has to contend with the fact that market breadth remains weak. Only a minority of stocks within the index are trading above their own 50-day averages, which means the recovery has been narrow rather than broad-based. Historically, narrow recoveries within broader downtrends have sometimes struggled to sustain momentum, though past patterns are not necessarily indicative of future price behaviour.
To the downside, the 6,300–6,350 area remains a level that traders may be watching closely. It caught the market once in late March, though there is no guarantee it would do so again.
Two scenarios heading into this week
The bounce holds and builds: If the S&P 500 can push back above the 200-day moving average and hold there, the character of the market changes. That would suggest the five-week selloff was a correction within a larger trend rather than the start of something more serious. The key test is whether buyers step in on any dip rather than sellers stepping in on any rally.
The rally fades : If price stalls in the 6,600–6,700 area and rolls over, it would confirm that the moving averages are acting as genuine resistance. In that scenario, a retest of the March lows becomes the more likely path. Friday's CPI data, which could show the largest single-month inflation jump in years, is a key event that traders will likely be watching closely for directional cues.
The S&P 500 has had its bounce. This week tells us whether it means anything.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade.70% of retail CFD accounts lose money. You should only invest money you can afford to lose. Past performance is not indicative of future results
When oil crosses $100, everything changesThere's a price level in oil that is often seen to change the conversation, not just in energy markets, but across equities, bonds, currencies and central bank thinking. That level is $100 per barrel. Brent crude has now crossed it.
The trigger is the US-Iran conflict, now in its fifth week, with the Strait of Hormuz under sustained pressure. The market appears to be no longer pricing in a quick resolution. It's pricing in disruption, and that changes everything downstream.
The knock-on effects are significant. Inflation forecasts are being revised higher. Rate cut expectations are being unwound. Futures markets are now pricing in a real possibility of rate hikes before end of 2026. Higher rates for longer is not the backdrop equity markets were built on at the start of the year, which helps explain why stocks have now posted five consecutive weeks of losses.
What the chart shows
Oil's move has been sharp and one-directional. Price has broken above resistance levels that capped the market for much of the past year, and the momentum reflects the strength of that shift. The 50-day moving average, previously a ceiling, now sits well below price.
The key level on the upside is the $110–115 area, where previous swing highs could potentially attract sellers. A hold above $100 keeps the structure intact. A drop back below (on diplomatic progress or a reopening of the Strait) would be the first possible signal that the risk premium is starting to unwind.
For now, oil is being driven more by headlines than technicals. But the chart helps identify where the important levels are. Right now, every move typically carries broader market consequences.
Watch the $100 level. It's no longer just an oil story.
Gold has pulled back hard. Is this a reset or a reversal?Gold had a remarkable run into early 2026. It hit record highs above $5,500 in January, driven by geopolitical uncertainty, a weaker dollar and strong central bank buying. Then it sold off — sharply. The metal has now dropped over 20% from those highs and is sitting around $4,300 as traders try to work out whether this is a healthy reset in a still-intact bull market, or the start of something more serious.
The pullback has a logic to it. Gold doesn't move in a straight line, and after such a powerful rally, some profit-taking was inevitable. But the speed of the decline has been notable, and a key support level around $4,880 has already given way which changes the short-term picture.
What makes this interesting right now is the tension between two forces pulling in opposite directions. On one hand, the macro backdrop still looks supportive for gold as the Middle East conflict is now in its fourth week with no clear resolution, oil prices are elevated and inflation risks are creeping back into the conversation. These are exactly the conditions that have historically tended to increase buyers’ demand for gold, although the link isn't guaranteed and may shift as market conditions change. On the other hand, the technical damage done by this selloff may signal the market needs time to stabilise before it can make another serious attempt higher.
On the daily chart, the 50-day moving average which acted as reliable support throughout last year's rally has now been broken. That doesn't mean the bull market is over, but it does mean the burden of proof has shifted. The next significant support area sits around $4,250–4,300, which lines up with the yearly open and a previous consolidation zone from late 2025. How buyers react in this area may provide insight into the underlying conviction behind the longer-term trend.
To the upside, the broken $4,880 level now acts as resistance. A recovery back above there would be an important first step in rebuilding the bullish structure.
For now the chart is in a corrective phase, and the most honest read is that gold needs to find a floor before the next directional move becomes clear. The levels are well-defined. The macro backdrop remains uncertain. Watch how the price behaves around $4,300 this week.
Disclaimer: This content is for informational and educational purposes only and does not constitute investment advice or recommendation to trade.Trading involves risks, and you should only invest money you can afford to lose. Past performance is not indicative of future results
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Is gold price front running a lower average hourly earnings? US hourly earnings hold the key for US dollar direction
Event: United States Non Farm Payrolls
Released: Monthly on the first Friday
Next release: 1:30 GMT January 06, 2023
Skilling point of view:
Flat US Job growth: Month-on-month US Nonfarm Payrolls have been slowing since February 2022 and now, US job growth has been relatively flat during the previous quarter.
Real US Average Hourly Earnings have increased: While new job creation has slowed, the average hourly earnings reported for November 2022 indicated the strongest increase in 10 months.
USD at risk?
Although the US dollar index has increased around 6% against most other developed currencies during the last 52 weeks, the US dollar could be in danger of weakening sharply against the major FX pairs on Friday, if the NFP report indicates that US Real Average Hourly Earnings fall below market consensus expectations. US real wages have been a key driver of higher inflation during 2022, so any signs that wages are backing off could place the USD under downside risk.
NFP market expectations for Friday, January 06, 2023
Forecasters are calling for at least 200,000 to 220,000 new jobs created during December, while the unemployment rate will remain steady at 3.7%.
The key potential high impact event driver could be if the average hourly earnings comes in above or below forecast.
Higher average earnings could support the Fed to keep interest rates higher for longer, while if average earnings fall below forecast then that could indicate early signs of slowing wage growth, which could even support a case for the Fed to make a policy shift for rate cuts sometime during 2023.
Not investment advice. Past performance does not guarantee or predict future performance.
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