S&P 500 futures are down by 1% in premarket trading after Fed’s Jim Bullard stated that the Fed may start raising rates at the end of 2022.
Treasury yields have recently started to rebound after yesterday’s pullback, but they stay well below highs that were reached after Fed meeting.
Meanwhile, U.S. dollar continues to gain ground against a broad basket of currencies, and it looks that it’s a major short squeeze. Stronger dollar is bearish for dollar-denominated stocks, so dollar’s recent move adds to the pressure.
However, it remains to be seen whether the market is ready for a material pullback. Yesterday’s attempt to gain downside momentum was quickly bought, highlighting the strength of the current bullish trend in the market.
Precious Metals Try To Rebound Despite Stronger Dollar
Gold has recently made an attempt to settle back above the resistance at $1800 but lost momentum and pulled back towards $1775. Silver also tried to gain more ground, but its upside move was stopped at $26.50.
It is not clear whether gold and silver will be able to move higher in case the U.S. dollar continues its upside move. Most likely, some traders would like to take positions in precious metals after the strong pullback, but it remains to be seen whether this support will be sufficient enough to push gold and silver to higher levels.
Meanwhile, gold mining stocks are gaining some ground in premarket trading after a brutal sell-off on Thursday.
WTI Declines Towards The $70 Level
WTI oil is currently trying to get to the test of the $70 level as the recent sell-off in commodity markets pushed oil traders to take some profits after the strong rally.
If WTI oil manages to settle below the $70 level, it will gain additional downside momentum which will be bearish for oil-related stocks. I’d note that oil segment suffered a serious sell-off during yesterday’s trading session, and shares of oil majors like Exxon Mobil or BP are under significant pressure in premarket trading.