Wall Street indices marginally rose in overnight trading, boosted by strong corporate earnings and optimism surrounding the resilience of the U.S. economy. The Dow Jones Industrial Average and the S&P 500 saw modest gains of 0.28% and 0.15% to close at 35,560.19 and 4,589.15 points respectively. The Nasdaq Composite was not far behind, climbing 0.21% to end at 14,346.02.
Oil prices also rallied, reaching a three-month high and registering the steepest monthly gain since January 2022. The uptick in prices was supported by signs of a tightening global supply and increasing demand through the remainder of the year. Consequently, West Texas Intermediate (WTI) crude rose 1.63% to $81.89 per barrel, while Brent climbed 0.67% to $85.56.
The U.S. Dollar remained relatively unchanged, slightly edging higher after a Federal Reserve survey revealed tighter credit standards and softer loan demand in the U.S. banks during Q2, an indication of rising interest rates’ impact on the economy. The USD/JPY pair rose by about 0.8%, influenced by investors processing the Bank of Japan’s (BoJ) recent decision to increase bond yields.
The GBP/USD pair, on the other hand, has experienced a robust surge, climbing 24% from a record low of 1.033 in September, propelled by a disappointing budget. The pair reached a 15-month peak of 1.314 in mid-July. However, traders have significantly reduced bets on a continued rally in the pound ahead of an expected rate hike by the Bank of England (BoE) later this week.
On the commodities front, gold prices advanced, marking their best month in four. A weakening dollar and the expectation that major central banks may be reaching a peak in interest rate hikes bolstered the surge. Spot gold added 0.3% to $1,965 per ounce.
In contrast, major digital assets declined on Monday, with Bitcoin (BTC/USD) and Ethereum (ETH/USD) wrapping up July on a sour note. Bitcoin traded at $29,218, down 0.4% in the past 24 hours, while Ethereum slipped 0.7% to $1,859.
Investors are eagerly watching this week’s economic releases, including the U.S. ISM surveys on manufacturing and services purchasing managers index, along with the July payrolls report. Additionally, the Bank of England’s (BoE) potential rate hike and the impact of the Fed’s monetary tightening on the U.S. economy will continue to be key areas of focus.