A sleepless battle—markets held their ground

| Last night, a trader at the NYSE slightly raised his chin, his eyes fixed tightly on the electronic market-quote screen above him. His gaze was sharp yet heavy, reflecting intense concern about market direction and a strong sense of uncertainty.

——The market is in a very fragile state of “directionless range trading”—the bulls want to buy the dip, but they’re being pinned down by high oil prices, high interest rates, and a strong US dollar.

After an overnight battle between bulls and bears, on Monday the global market trend can be described in three words: “held its ground.”

- US stocks didn’t fall sharply. The S&P 500 dropped 0.19%, the Nasdaq was essentially flat, and the Philadelphia Semiconductor Index rebounded;

- Gold prices rebounded, moving back above $4,000;

- US crude oil surged and then pulled back. It rose as high as $85, dipped as low as $80, and ultimately closed at $82;

- However, the US Dollar Index rose, edging toward the 101 level. Meanwhile, the yield on the 10-year US Treasury note is nearing 4.6%.

First, today we used two sentences to describe yesterday’s and today’s markets:

On Monday, it was a failed rebound day. As for a “failed rebound,” it’s not that “prices didn’t rise,” but that “the rally couldn’t be sustained.” For example, the Nasdaq jumped 0.8% at the open, but by the close it had given back all of its gains.
On Tuesday, it’s a rebound-temptation day. Tuesday isn’t about whether the market can surge higher; it’s about whether three pressures can stop worsening: oil prices shouldn’t stay above $85, the US Treasury shouldn’t break above 4.60%, and the Philadelphia Semiconductor Index shouldn’t fall again into a fresh decline.

Second, oil prices are now the ceiling for US stocks. Trump said Iran would “pay the price” for the deaths of US service members, and the US continues airstrikes; at the same time, a mediator is also putting forward a ceasefire proposal. This puts oil prices in a very uncomfortable situation—there’s hope for a cooldown, but there isn’t enough credible evidence that a cooldown is actually coming. What determines the market now isn’t war headlines, but how oil prices interpret these news.

Third, chip stocks rebounded, but that still doesn’t mean AI-related risks have been cleared. After the Philadelphia Semiconductor Index fell into a bear-market zone last week, a rebound appeared on Monday—this is a normal technical repair. The real big test is on Wednesday: Alphabet’s and Tesla’s earnings reports will open the big-tech earnings season, and the market won’t place heavy bets ahead of time on Tuesday. Yesterday’s biggest significance wasn’t the rise, but that the market handed decision-making power over to the earnings reports.

Fourth, the US dollar and Treasury yields are still worth keeping a close eye on. Both have already moved to near the 101 and 4.6% levels we’ve been watching. With the 10-year US Treasury yield sitting at a high level, and alongside a strengthening dollar, it amounts to carrying out “automatic rate hikes” directly across the real economy and capital markets.

Risk warning: This article is for analysis only based on publicly available information and market data. It is for information exchange purposes only and does not constitute any investment advice or any promise of returns. Financial markets involve risk, and investment decisions must be made independently based on one’s own circumstances.