S&P 500 Shuffles as Long-End Yields Fall and Metals Rally

Also, 30-year T-bond, silver, crude oil and British pound futures

1. S&P 500 E-mini futures (/ES): -0.05%  
2. 30-year T-bond futures (/ZB): +0.22%  
3. Silver futures (/SI):  +1.16%  
4. Crude oil futures (/CL): -0.33% 
5. British pound futures (/6B): +0.24% 

Technology stocks led gains on Wall Street this morning after Russia said President Vladimir Putin would meet with President Trump in the coming days to discuss a potential truce in the Ukraine war. Trump announced companies that produce goods in the United States would get exemptions from tariffs on chip imports, which boosted semiconductor stocks. Meanwhile, jobless claims data didn’t add to the fear that the labor market is rapidly deteriorating, although policymakers seem keener on rate cuts through the remainder of the year.  

S&P 500 futures (/ESU5) rose this morning after Trump announced tariffs on imported chips but spared companies that invest in the United States. The exemptions helped companies like Nvidia (NVDA) and Advanced Micro Devices (AMD) move higher ahead of the bell. The VanEck Semiconductor ETF (SMH) gained over 2% in pre-market trading. Apple (AAPL) strength persisted today following an announcement the iPhone maker would invest in the United States. Intel (INTC) slipped ahead of the bell after Trump used social media to call for its CEO Lip-Bu Tan to resign. Eli Lilly (LLY) posted impressive results, but the stock fell in pre-market trading after investors learned that about 10% of patients in its drug trial for orforglipron stopped treatment because of side effects. 

Treasury markets were mixed this morning, with long-dated bonds rising and short-dated notes falling. Auction results for three-year and 10-year notes didn’t impress this week, but traders now have a 30-year bond auction in focus for today. 30-year T-bond futures (/ZBU5) rose 0.08% ahead of the New York trading session. Overnight, Japan saw good results for its 30-year bonds, with pension funds boosting demand for the debt. Today’s auction results could help to bolster prices if results impress. 

Precious metals moved higher this morning, with silver (/SIU5) leading the charge by gaining nearly 2% in early trading. China’s central bank continued to buy gold in July, according to government data. Meanwhile, a weak dollar is helping to clear the path higher for gold and silver prices. Today’s move reestablishes prices above the 21-day exponential moving average and the June swing high, which could pave the way for further technical strength.  

Crude oil prices (/CLU5) traded nearly unchanged this morning. China’s government data showed oil imports in July were up 11.5% from a year ago, although lower than June. The country’s refined fuel exports were higher from a year ago. Meanwhile, implied demand for fuel products slipped in the US, per the most recent data from the Energy Information Administration. Natural gas prices (/NGU5) were slightly higher to build on gains from recent days following a multi-week sell-off that briefly brought prices below the three handle.  

The Bank of England cut interest rates but expressed concern over inflation, which trimmed rate cut bets through the rest of the year. Gilt yields rose after the decision, helping British Pound futures (/6BU5) to move 0.3% higher by early US trading. Policymakers seem focused on inflation rather than a weakening labor market, putting a stagflation tilt on the outlook. Meanwhile, concern over the United Kingdom’s fiscal position lingers, but traders are moving the pound higher on rate differentials today. 

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater
Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

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