18.08.202614:55 Forex Analysis & Reviews: US Stock Market News Digest on August 18

Weak US macroeconomic data weakened the dollar and reduced expectations for further Fed rate hikes

The S&P 500 and Nasdaq finished the session with modest losses, reacting to the latest batch of weak US macroeconomic data. The slowdown in economic indicators was immediately reflected in the FX market, causing the US dollar to weaken against a basket of major currencies.

Against this backdrop, investors sharply scaled back their expectations for further monetary tightening by the Federal Reserve, pricing in a pause in the rate-hiking cycle. Capital flows out of risk assets and into safe-haven securities pushed US Treasury prices up and yields down. More details at the link.

Washington accused more than forty countries of helping China evade US tariffs

The geo-economic confrontation between the world's largest economies is reaching a new level: the US administration has formally accused more than forty countries of participating in schemes that allow Chinese firms to circumvent US customs tariffs. Washington is stepping up enforcement against re?exports and other evasion channels, increasing pressure on its international partners.

Alongside trade restrictions, a race for leadership in advanced technology is unfolding. While the White House prepares to unveil an updated national AI strategy, China continues to show impressive progress in developing indigenous technological solutions and cutting production costs, reducing dependence on Western technology. More details at the link.

US policy uncertainty pushed gold toward $4,450 per ounce

Precious metal prices resumed their climb, reaching $4,450 per ounce amid ongoing political and monetary uncertainty in the United States. Investors are worried about central bank independence, the FIMA mechanism and currency interventions by the US and Japan — actions the market views as a covert form of quantitative easing. In such conditions, gold traditionally benefits as the principal safe-haven asset; global central banks bought a record 51 tonnes of gold in June.

China is a separate driver, with gold imports hitting new highs as part of Beijing's strategy to internationalize the yuan and build an alternative to the dollar system. According to BofA estimates, current investment demand supports a price near $4,000, and a break above $5,000 would require investor purchases to accelerate by about 21% year-on-year. More details at the link.

Escalation in the Persian Gulf pushed oil above $91 and sent Wall Street futures tumbling

A new round of escalation between the US and Iran, including threats against Oman and reports of a UAE tanker seizure, sparked a surge in Brent crude above the psychological $91 per barrel mark. The jump in energy prices immediately fed investors' inflation fears, driving 30-year US Treasury yields to a multi-year high of 5.31% and triggering declines in futures on major US stock indices.

Under the pressure on stocks, only the energy sector maintained positive momentum, with large oil and gas companies as beneficiaries. Ahead lies a busy week for market participants: earnings reports from retail giants Walmart, Home Depot and Target will provide a read on US consumer health, while the release of the Fed minutes will shed light on internal debates at the central bank over interest rates. For those planning to trade these volatile events, oil and stock index trading is available on InstaForex. More details at the link.