U.S. Indexes were mixed on Tuesday, with the NASDAQ 100 and Russell 2000 underperforming while the S&P 500 closed flat and the Dow closed slightly firmer. Sector performance was also mixed, with Health Care, Consumer Staples and Energy outperforming, while Technology, Consumer Discretionary and Industrials lagged. Tech weighed on the broader market as semiconductor names saw profit taking after recent outperformance, although equities did pare the majority of losses into the close as chip stocks bounced from intraday lows without a clear driver. The geopolitical backdrop remained tense, with markets continuing to focus on the risk of renewed conflict in the Middle East after President Trump described the ceasefire as “very weak”. Tuesday’s developments included reports that Iran had targeted Kuwait, drawing strong condemnation from the UAE, while additional reports suggested Saudi Arabia had struck Iran during the early stages of the conflict. Meanwhile, Iran reiterated it would not return to negotiations unless five conditions are met, including an end to the war, sanctions relief, the release of frozen funds, compensation, and the recognition of Iranian sovereignty over Hormuz. The elevated geopolitical risk premium pushed crude prices higher, weighing on Treasuries and lifting Bond Yields across the curve. Meanwhile, the April CPI report came in hotter than expected, particularly across the core metrics, while services inflation accelerated further. The data saw markets increase Fed tightening expectations, with traders pricing around a 43% probability of a rate hike this year. In FX, the Dollar remained firm amid higher Treasury yields and elevated energy prices. Sterling lagged on continued political pressure surrounding UK PM Starmer, while petro-sensitive currencies like the Canadian Dollar finding some support from the rise in crude prices. Meanwhile, the Australian Dollar was supported by the afternoon equity turnaround. Headline CPI rose 0.6% M/M in April, in line with expectations and easing from the prior 0.9% pace. However, the Y/Y rate accelerated to 3.8% from 3.3%, above the 3.7% forecast. Within the report, the energy index rose 3.8% in April, accounting for more than 40% of the monthly increase in headline CPI. The underlying inflation details were firmer. Core CPI rose 0.4% M/M (0.376% unrounded), above both the 0.3% forecast and the prior 0.2%, while the Y/Y rate accelerated to 2.8% from 2.6%, also topping expectations of 2.7%. Core services inflation picked up to 0.5% M/M and 3.3% Y/Y, while supercore inflation accelerated to 3.4%, reinforcing concerns that underlying price pressures remain sticky beyond the energy shock. The hotter core metrics are likely to concern Fed officials, particularly given the acceleration in services inflation. Officials had previously expected tariff-related inflation effects to gradually roll off over the next two quarters, but persistent services inflation alongside elevated energy prices tied to the ongoing US/Iran conflict could delay any return to Fed easing. Attention now also turns to the expected nomination of Kevin Warsh as Fed Chair on Wednesday, ahead of the June meeting, after he was confirmed by the US Senate to be Federal Reserve Governor on Tuesday. Warsh is widely viewed as more dovish and forward-looking than Powell, although his recent Senate testimony pushed back against perceptions he would support politically driven rate cuts, stressing he would not pre-commit to policy decisions. Fed Member Goolsbee said the CPI report showed “not much that’s good”. He added that the April CPI report was worse than expected, and the worst part is the services inflation. This is not the first time the Chicago Fed President has shown concern over services inflation, reiterating that inflation is going the wrong way, not just in oil-related and tariff-related things. Goolsbee, however, remains optimistic that rates can come down a fair amount, but need progress on inflation. He noted that the labour market is stable, but not good. Separately, he said the interconnection of private credit with conventional institutions is not as big as the connections in the 2007-2009 financial crisis. Elsewhere, Oil surged a further 4% while Gold ended Tuesday’s volatile trading session with a 1% gain.
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For anyone following my Platinum Service it made 405 points yesterday and is now ahead by 92 points for May having ended April with a gain of 1730 points, after ending March with a massive gain of 9002 points, having closed February with a strong gain of 5482 points after ending January with a gain of 4757 points, having closed December with a gain of 2599 points, after ending the month of November with a gain of 4542 points, after ending October with a nice gain of 5110 points after closing September with a gain of 3774 points while ending August with a gain of 3362 points after closing July with a gain of 3753 points after closing June with a gain of 3530 points, having closed May with a gain of 3606 points, after closing April with a gain of 7685 points after closing March with a gain of 2254 points while closing February with a gain of 4180 points. January ended with a gain of 2768 points while 1997 points were gained in December. October ended with a gain of 2179 points, after closing September with a gain of 4402 points, following a loss of 301 points in August. July gained 1908 points while June saw a gain of 2074 points. The Platinum Service made a record 9619 points in October 2022. Since I started this New Platinum Service in June 2015 it has averaged a monthly gain of over 2300 points. I have a YouTube Channel which contains recent interviews I have given This can be viewed by clicking HERE Please subscribe to this for new interview notification
Equities
The S&P 500 closed 0.16% lower at a price of 7400.
The Dow Jones Industrial Average closed 56 points higher for a 0.11% gain at a price of 49,760.
The NASDAQ 100 closed 0.87% lower at a price of 29,064.
The Stoxx Europe 600 Index closed 1.01% lower.
This Morning, the MSCI Asia Pacific closed 0.3% higher.
This Morning, the Nikkei closed 0.75% higher at a price of 63,210.
Currencies
The Bloomberg Dollar Spot Index closed 0.43% higher.
The Euro closed 0.42% lower at $1.1732.
The British Pound closed 0.65% lower at $1.3523.
The Japanese Yen fell 0.32% closing at $157.68.
Bonds
U.K.’s 10-Year Gilt closed 11basis points higher at 5.11%.
Germany’s 10-Year Bund Yield closed 7 basis points higher at 3.11%
U.S.10 Year Treasury closed 7 basis points higher at 4.46%.
Commodities
West Texas Intermediate crude closed 3.79% higher at $101.80 a barrel.
Gold closed 1.14% lower at $4681.10 an ounce.
This morning on the Economic Front we already had the release of German Wholesale Price Index which rose 6.3% Y/Y versus +4.1% expected. Next, we have the Euro-Zone GDP, Employment Change and Industrial Production at 10.00 am. This is followed by U.S. MBA Mortgage Applications at 12.00 pm and PPI at 1.30 pm. Finally, we have a speech from Fed Member Collins at 4.30 pm and a very important Thirty-Year Treasury Auction at 6.00 pm.
Cash S&P 500
Stocks finished the day mostly lower but well off intraday lows, after the S&P 500 had been down around 1%. I would not call this a watershed move for the Index, but the market did fall on a Treasury bill settlement day, and that is important because it confirms the pattern remains intact for now. Thursday is the next T-bill settlement day, and we should begin to see significantly higher bill issuance starting next week. If the spring patterns continue to play out, many market participants may find themselves completely offside, with no idea what hit them. The only thing that appeared to save the market today was the gamma positioning heading into Friday. The 7340-7350 area remains sticky and is likely to provide support through the end of this week. That should change next week once the monthly options expiration gamma rolls off. At the very least, yesterday’s move allowed the ‘Open Gap’ from May 7 to fill. The VIX was also lower on the day. It is not often you see this type of spot-down, vol-down session, and I think it supports the idea that Tuesday’s rebound from the lows may have been facilitated by PUT positions being closed out in the S&P 500. The VIX peaked around midday, just as the S&P 500 fell into the gamma support area and then declined steadily for the rest of the session. Additionally, the CPI report came in hotter than expected on the core reading, which helped send Treasury yields higher. This pushed the 30-year Treasury yield to around 5.03%, marking its highest close since May 2025. Right now, the 30-year is at an important level because if it manages to break out from here, it will mean moving above the highs reached in 2023. The 10-year Treasury yield also finally cleared resistance and the downtrend around 4.45%. If it follows through on Wednesday, yields could be headed significantly higher, given the importance of completing this multi-year consolidation pattern. Meanwhile, the 14 Day RSI closed at a still extremely overbought 74 while internally breadth was weak as shown by the McClellan Oscillator which closed at negative 55 last night. My ‘’Nothing Matters’’ continues with oil tagging on a further 4% yesterday. The S&P has an ‘Open Gap’ from last week from 7257/7294. I will use any tag of the gap to close my 7097 average short position and reassess if triggered. With the S&P again closing over the top of its Daily Bollinger Band we should have at least a small retracement over the coming days. If this view changes I will be back with a new update for my Platinum Members.
EUR/USD
No Change: I am still flat as the Euro again traded in a narrow range again on Tuesday. I still believe that the Euro is overvalued. The Euro has short-term resistance from 1.1840/1.1920. I will now raise my sell level to this area with a higher 1.2005 ‘Closing Stop’. Meanwhile, I will continue to be a buyer on any further dip lower to 1.1580/1.1660 while leaving my 1.1495 ‘Closing Stop’ unchanged. If I am taken short, I will have a T/P level at 1.1770. If I am taken long, I will have a T/P level at 1.1730.
Dollar Index
No Change: The Dollar has barely moved during the past two weeks unlike the equity and bond markets which is incredible considering that Japan’s Ministry of Finance spent an estimated $34.5 billion buying yen on April 30 after the currency breached 160 against the Dollar. It was the first intervention since July 2024. This is the central tension of Prime Minister Takaichi’s economic agenda. She wants cheap government borrowing to fund a defense and industrial buildup, a stable yen to protect household purchasing power, and growth. She cannot have all three. The tension is institutional as well as economic: Takaichi needs the Bank of Japan to keep Interest Rates low enough to fund her ambitions but the BOJ has been inching towards normalisation and the Finance Ministry worries more about the Yen weakening than Takaichi’s agenda progressing. I am still long from 10 days ago at a price of 98.30. I will add to this position at 97.50 while leaving my 96.95 ‘Closing Stop’ unchanged. I will leave my T/P level unchanged at 98.75. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Russell 2000
I am still flat. Today, I will continue to be a seller from 2880/2950 with a lower 3005 ‘Closing Stop’. If I am taken short, I will have a T/P level at 2830. Given how overbought the Russell is trading I still do not want to be long the market at this time.
FTSE 100
Overnight, the FTSE rallied to my 10315 T/P level on my latest 10260 average long position and I am now flat. Today, I will again be a buyer on any dip lower to 10170/10250 with a lower 10095 ‘Closing Stop’. If I am taken long, I will have a T/P level at 10320. I still do not want to be short the FTSE at this time.
Dow Rolling Contract
Frustrating! The Dow missed Tuesday’s buy level by just 4 points before turning around and rallying over 450 points into the close. Today, I will raise my buy level to 49150/49450 with a higher 48895 ‘Closing Stop’. If I am taken long, I will have a T/P level at 49780.
Cash NASDAQ 100
My 29320 short position worked well as the market at one stage had fallen almost 700 points. This move lower saw my 28970 T/P level triggered and I am now flat. The NDX attracted strong buying at Tuesday’s lows and is now trading over 500 points higher at a price of 29220 as I go to post. With the RSI back at 84 I will continue to be a seller of rallies. The NDX has resistance from 29240/29440 where I will again be a seller with a lower 29605 ‘Closing Stop’. If I am taken short, I will have a T/P level at 28950.
December BUND
Tuesday’s hotter than expected CPI report saw the Bund hit my buy range for a now 124.95 long position. I will add to this trade at 124.15 while leaving my 123.55 ‘Closing Stop’ unchanged. I will now lower my T/P level to 125.60. If any of the above levels are hit, I will be back with a new update for my Platinum Members.
Gold Rolling Contract
I am still flat. Today, I will not chase the price of Gold higher believing that we are not done with lower prices for now. Today, I will continue to be a buyer from 4450/4550 with the same 4325 ‘Closing Stop’. If I am taken long, I will have a T/P level at 4680. If this view changes, I will be back with a new update for my Platinum Members.
Silver Rolling Contract
Silver traded in a narrow range on Tuesday and I am still flat. Today, I will leave my buy level unchanged at 73.50/76.50 with the same 70.15 ‘Closing Stop’. If I am taken long, I will have a T/P level at 79.75.
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