Stocks Retreat Amid Sell-Off In The Oil Market

S&P 500 futures are losing ground in premarket trading as traders remain cautious near all-time high levels despite the pullback in Treasury yields.

The yield of 10-year Treasuries has recently made an attempt to settle above 1.30% but failed to develop sufficient upside momentum and pulled back. In case the yield of 10-year Treasuries manages to settle below the 20 EMA at 1.2735%, it may gain additional downside momentum which will be bullish for tech stocks.

Today, traders will have a chance to take a look at Consumer Inflation Expectations report for July. Analysts expect that Consumer Inflation Expectations declined from 4.8% in June to 4.7% in July, but it remains to be seen whether consumers became less worried about inflation.

If Consumer Inflation Expectations are higher than expected, stocks may find themselves under pressure on speculation that Fed will have to decrease its asset purchase program in the upcoming months.

WTI Oil Dives On Concerns About China’s Growth
JPMorgan Chase, Morgan Stanley and Goldman Sachs cut their forecasts for China’s economic growth on Monday, and WTI oil gained additional downside momentum.

Currently, WTI oil is trying to settle below $65.50. In case this attempt is successful, WTI oil will move towards the $65 level which will put additional pressure on oil-related stocks.

Precious Metals Rebound From Recent Lows But Remain Under Pressure
Gold and silver had a very bad start of the trading week as concerns about Fed’s next moves triggered a major sell-off. Silver almost got to the test of the $22 level before rebounding closer to $24. Gold made an attempt to settle below $1675 but lost momentum and rebounded towards $1750.

The recent rebound will not help gold mining stocks and silver mining stocks at the start of today’s trading session as they are already losing ground in premarket trading.

Traders will also watch the direction of the U.S. dollar, which is flat against a broad basket of currencies. If the U.S. Dollar Index gets above the resistance at 92.80 and moves towards the next resistance at 93.10, gold and silver may find themselves under more pressure.

Subscribe to our newsletter

Don't miss new updates on your email