S&P 500 futures are swinging between gains and losses in premarket trading while traders monitor the recent developments in U.S. government bond markets.
Yesterday, it looked that Fed Chair Jerome Powell managed to calm bond investors, and Treasury yields were moving lower. Today, the bond market is once again worried about inflation, and Treasury yields are increasing.
Currently, the yield of 10-year Treasuries is trying to settle above 1.67%. Higher yields have already put pressure on tech stocks which are losing some ground in premarket trading.
Gold and silver are also under pressure as higher yields and stronger U.S. dollar serve as bearish catalysts.
Oil Moves Lower Amid Progress In Iran Nuclear Talks
WTI oil is currently trying to settle below the 50 EMA at $59.20 as traders react to the latest news about Iran nuclear talks. Russia and China noted that progress has been made, and talks will resume next week.
The aim of the current talks is to bring Iran and U.S. back to the negotiation table so that U.S. lifts sanctions and Iran returns back into compliance with the nuclear deal.
The potential return of Iranian oil is a bearish caalyst for the oil market. However, it should be noted that it is not clear whether Iran and U.S. will be able to reach any deal as both sides distrust each other.
U.S. Dollar Gains Ground At The End Of A Challenging Week
U.S. dollar was under pressure this week as Treasury yields moved lower and investors’ risk appetite increased which was bullish for riskier currencies.
However, the U.S. dollar managed to gain some upside momentum at the end of the week as foreign exchange market traders focused on the relative strength of the U.S. economy.
If the American currency manages to get back to the upside mode, commodity markets will find themselves under pressure which will be bearish for commodity-related stocks.