US Markets Mixed as AI Volatility Persists and Fed Hike Expectations Ease

Index Update

US stocks closed mixed on Thursday as weakness in technology shares offset gains in traditional sectors. The S&P 500 was flat, the Nasdaq 100 fell 0.8%, and the Dow surged 595 points to a record high. Semiconductor stocks declined amid concerns over stretched AI valuations, with Micron, Applied Materials, AMD, Meta, and Tesla posting sharp losses, while Apple, Visa, and Walmart advanced. Softer June employment data reduced expectations of an imminent Federal Reserve rate hike. For the week, the S&P 500 gained 1.8%, the Nasdaq rose 2.1%, and the Dow added 2%.

Market Movers

Among the top-performing stocks of the session ClearOne, Inc. surged 101.24%, while Big Tree Cloud Holdings Limited. rallied 55.21%. On the losing side, Elicio Therapeutics, Inc. fell 37.35%, while Julong Holding Limited. declined 33.90%, making them the weakest performers during the trading day.

Commodities Update

Crude oil and Brent traded below USD 69 and USD 72 per barrel, respectively, on Monday, near their lowest levels since late February, as shipping through the Strait of Hormuz continued to normalize and OPEC+ approved a 188,000-barrel-per-day production increase for next month. Rising exports from major Gulf producers, including Saudi Arabia’s return toward pre-war levels and the UAE’s full restoration of shipping flows, further eased supply concerns and pressured prices.

Gold and silver traded above USD 4,100 and USD 61 per ounce, respectively, on Monday, retaining most of last week’s gains as weaker US employment data and lower oil prices reduced expectations for further Federal Reserve rate hikes. June nonfarm payrolls rose by just 57,000, well below the 110,000 forecast, while easing energy prices helped moderate inflation concerns, lowering the probability of a September rate hike to 50% from 66%.

Macro Updates

Dollar Holds Near Three-Week Low as Fed Hike Bets Ease

The dollar index edged higher to around 101 on Monday but remained close to a three-week low after last week’s sharp decline, as weaker June payrolls data led investors to reduce expectations for further Federal Reserve rate hikes. Easing oil prices also helped calm inflation concerns, while markets lowered the probability of a September rate hike to 56% from 64% before the jobs report. Investors now await the FOMC minutes for policy signals, while the dollar gained most against the yen, which stayed near a 40-year low amid intervention concerns.

Bonds Commentary

The US 10-year Treasury yield eased to around 4.47% on Monday as investors awaited the Federal Reserve’s June meeting minutes for further guidance on interest rates. Weaker-than-expected June payroll growth of 57,000 reduced expectations for a September rate hike, while lower oil prices and the prospect of increased OPEC+ supply helped ease inflation concerns. However, the unemployment rate unexpectedly declined to 4.2% due mainly to lower labor force participation.

Futures Update

US equity futures traded mostly higher on Monday, with S&P 500 and Nasdaq 100 futures rising 0.4% and nearly 1%, respectively, supported by gains in semiconductor stocks amid optimism over continued AI demand. Chipmakers including Micron, Sandisk, and Nvidia advanced ahead of Samsung's sales update and SK Hynix's US trading debut, while investors also looked ahead to the FOMC meeting minutes for further clarity on the Federal Reserve's outlook for inflation and the labor market.

The major U.S. indices ended Thursday on a mixed note after opening higher but losing momentum following the release of U.S. jobless claims data. The Dow Jones Industrial Average surged 594.83 points, or 1.14%, to close at 52,900.07. Meanwhile, the S&P 500 maintained a constructive intraday outlook, continuing to trade above both its 20-day and 50-day EMAs, reinforcing the prevailing bullish trend. The RSI remains near the neutral 55 level, suggesting there is still room for further gains if buying momentum improves. As long as the index holds above the 7,440–7,450 support zone, pullbacks are likely to attract buyers, while a sustained move above the 7,520–7,550 resistance area could pave the way for another leg higher.