
On Monday, Dow Jones rose to new record highs, while the S&P 500 and Nasdaq posted solid advances as last week’s tech driven sell-off failed to cause lasting technical damage. The S&P 500 reclaimed key support levels above its 50- and 100-day moving averages, a bullish signal for market sentiment.
Investors remain cautiously optimistic, expecting choppy but selective gains this week. Attention now turns to ongoing earnings reports as well as key U.S. economic data this week, with retail sales due Tuesday, jobs data on Wednesday and inflation figures on Friday.
In Asia, Japan’s Nikkei 225 extended its post election rally on Tuesday, climbing to fresh record highs of 57,960 following Prime Minister Sanae Takaichi’s landslide election victory. The Nikkei rose 2.7% earlier today, while the broader Topix gained 2%, also hitting new highs.
In the currencies market, EUR/USD is consolidating near the 1.1900 level after strong gains over the past two days, trading in a narrow range during the Asian session. The pair is finding mild resistance as the U.S. dollar recovers slightly from recent losses, though broader USD upside remains limited.
Expectations that the Federal Reserve will cut rates twice this year, ongoing concerns about Fed independence, and a risk-on market tone continue to weigh on the dollar. At the same time, a relatively hawkish European Central Bank stance and resilient Eurozone growth support the euro, keeping the broader bias for EUR/USD tilted to the upside.
Gold fell slightly in Asian trading, ending a two-day advance, but holds firm below the $5,000 level as selling pressure remains limited. Improved risk sentiment, driven by Japan’s election outcome and easing Middle East tensions, has reduced safe-haven demand and weighed on prices.
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