Equity Correction Builds While Oil and Silver React to Headlines

Hello traders, welcome to Thursday. Let’s start with the broader market picture, where we are seeing a more meaningful correction developing across equity indices. Indices moved lower yesterday and, although today’s session is bringing a modest bullish pullback, the overall structure suggests that yesterday may have marked the beginning of a larger bearish correction. This move is not purely technical in nature, as it is clearly rooted in a busy and impactful fundamental backdrop.

Starting with yesterday’s macro data, we saw producer price inflation and retail sales. Core PPI came in below expectations, pointing to easing price pressures at the producer level. At the same time, retail sales surprised to the upside, signaling continued strength on the consumer side. Taken together, the data was mixed and did not provide a clear directional signal for risk assets.

Looking at today’s calendar, attention turns to UK GDP, expected at 0.1%, followed by the usual US unemployment claims. In addition, the US Empire State Manufacturing Index and the Philadelphia Fed Manufacturing Index are due, with the latter expected at minus 1.6. While these releases matter, the dominant driver today is clearly political rather than macroeconomic.

A lot is happening around Donald Trump. Reports indicate that President Trump signed an executive action related to critical minerals, a development that coincides with the sharp drop we are seeing in silver today. In addition, he signed an action allowing the US to take a 25% share on chip sales, adding further pressure to specific segments of the commodities and technology space. Most importantly for global markets, we have developments related to Iran. Trump commented on de-escalation, stating that he was informed that killings in Iran are stopping and that there are no plans for executions. This easing of geopolitical tension is having a direct and immediate impact on energy markets.

Oil is reacting strongly to this de-escalation narrative. Commodities are undergoing a broader correction today, with Brent crude down around 3% and WTI lower by nearly 2%. Copper is down roughly 1%. Gold is holding up relatively well and remains slightly positive, showing resilience despite the broader pullback in commodities. Silver, however, is clearly struggling, and the weakness extends to palladium and platinum as well.

One notable exception to the corrective tone is the cryptocurrency market. Cryptos are pushing higher, with Bitcoin extending its recent rally. Over the past few days, Bitcoin has posted strong gains and is currently trading at its highest levels since mid-November, underlining the strength of this upswing and the continued rotation into alternative risk assets despite weakness in equities and commodities.

Source: https://www.axiory.com/analytics/market-news/equity-correction-builds-while-oil-and-silver-reac