Equities Mixed as Nasdaq Rises, Dow Dips; Gold Up, Oil Down Amid Hormuz Tensions

Lead US equities closed with mixed results today. The Nasdaq 100 ETF saw a notable gain of 0.80%, and the S&P 500 ETF increased by 0.26%. In contrast, the Dow ETF experienced a slight dip of 0.03%. Gold futures climbed 0.70%, while WTI crude oil futures fell 0.36% amidst ongoing geopolitical tensions in the Strait of Hormuz. Session narrative Today's trading session saw a divergent performance across US equity indices. The Nasdaq 100 ETF was the strongest performer, advancing 0.80%, followed by the S&P 500 ETF with a 0.26% gain. The Russell 2000 ETF also posted a solid increase of 0.62%. However, the Dow ETF ended the day down 0.03%. Volatility, as measured by the VIX, decreased by 5.56%. In economic news, the US Consumer Price Index for July was released, showing a year-over-year increase of 3.4%, a slight moderation from the 3.5% recorded in June. This data point was closely watched for its implications on future monetary policy. Geopolitical developments remained a significant factor, with reports indicating that the Strait of Hormuz remains blocked. News also emerged of Iran adopting a more offensive military doctrine and ongoing deadlocked talks between Iran and the US regarding concessions. Cross-asset check In the commodities market, gold futures saw a healthy rise of 0.70%, trading at 4472. Silver futures also gained 0.94%. Conversely, crude oil prices declined, with WTI crude futures falling 0.36% to 82.90 and Brent crude futures down 0.29%. Natural gas futures, however, increased by 0.98%. In the rates market, the US 10-year yield edged down 0.04%. The US Dollar Index strengthened by 0.17%. Major currency pairs saw the EUR/USD decline by 0.17% and the GBP/USD fall by 0.10%, while the USD/JPY gained 0.14%. Themes & continuing stories The primary theme dominating the session was the persistent geopolitical tension surrounding the Strait of Hormuz. Reports highlighted Iran's harder military posture, shipping disruptions, and a shift towards a more offensive military doctrine. Talks between Iran and the US remain deadlocked, with both sides demanding concessions, contributing to the uncertainty in the region. The blocking of the Strait of Hormuz continues to be a key concern for global energy markets. Another significant theme was the release of US CPI data for July, which showed a slight deceleration in inflation, coming in at 3.4% year-over-year. This data point is crucial for market participants assessing the Federal Reserve's future policy decisions. What’s ahead Looking ahead, market participants will continue to monitor developments in the Strait of Hormuz and any further statements from Iran or the US. The implications of the latest CPI data on inflation expectations and central bank policy will also be a focal point. Any further economic data releases or corporate earnings reports will also be closely watched for their potential impact on market sentiment.