Trade Talks Stall, Oil Slumps, and Investors Eye Fed Policy

Image Source : Krish Capital Pty Ltd

Index Update

The S&P 500 futures dropped 0.8%, threatening to end a 9-day winning streak, while Nasdaq 100 and Dow futures also fell. President Trump ruled out talks with China’s Xi this week but hinted at other potential trade deals. Tech megacaps traded lower premarket, with notable declines in Apple, Nvidia, Amazon, and others. Berkshire Hathaway shares also slipped after Warren Buffett announced plans to retire at year-end, signaling a major leadership transition for the firm.

Market Movers

On Friday, the top gainers were  Classover Holdings, Inc (+54.48%), followed by AirSculpt Technologies, Inc (+25.66%). On the contrary Ardelyx, Inc (-25.41%) and              Viavi Solutions Inc (-19.44%) declined the most the same day.

Commodities Update

Oil prices dropped sharply as OPEC+ announced plans to accelerate output increases, raising concerns about a global supply glut. WTI crude fell over 2% to around $56.9 per barrel, while Brent declined to about $60. The group plans to boost production by 411,000 barrels per day in June, potentially restoring up to 2.2 million bpd by November. The move, led by Saudi Arabia, is seen as a response to quota violations by some members. These supply worries overshadowed potential easing of U.S.-China trade tensions. Meanwhile, geopolitical tensions escalated in the Middle East, with threats exchanged between Israel and Iran following a Houthi missile strike near Tel Aviv.

Gold prices rose to approximately $3,260 per ounce, supported by a weaker U.S. dollar and uncertainty surrounding trade negotiations between the U.S. and China. Market participants are awaiting the Federal Reserve’s upcoming policy decision, where rates are expected to remain unchanged despite political pressure for cuts.

Macro Update

The U.S. dollar index fell below 100 as investors awaited clarity on U.S.-China trade talks and the Federal Reserve’s upcoming policy decision. Although President Trump expressed optimism about a potential deal, no concrete details were provided, while China insisted that the U.S. must first lift tariffs to begin talks. Attention is now on the Fed, which is expected to hold rates steady, especially after a strong April jobs report reduced the likelihood of a near-term rate cut. Market expectations for a June cut have dropped to 37%, down from 64% a month ago.

Futures Update

U.S. stock futures declined as investors reacted to a series of trade-related developments involving steep tariffs from both the U.S. and China, and turned their attention to upcoming corporate earnings and central bank decisions. The previous session saw gains, driven by stronger-than-expected job growth despite the economy contracting in the first quarter due to a surge in imports. Market participants are also awaiting key data on the services sector and interest rate announcements from major central banks.

On Friday, the stock market saw significant gains, with major indices reaching their highest closing levels in a month. The S&P 500 achieved its longest winning streak in over two decades, closing higher for the ninth straight session with an increase of 82.53 points (1.47%) to 5,686.66. Technical indicators suggest further potential for upward movement, as the 14-period RSI remains above the midpoint and the index broke above its downward-sloping trendline. However, the price is currently near the 50-period exponential moving average, which could present short-term resistance, while key support is at 5,433 and resistance is at 5,732.