investingLive Americas market wrap: Gold and oil extend gains as the yen weakens
Key Takeaways
- •The Japanese yen fell sharply on Monday, with USD/JPY rising over 150 pips to push through 159.00, undoing much of the currency's post-intervention gains.
- •Trump shifted from considering military action against Iran to pursuing a blockade strategy and demanding compensation, while markets see low odds of a near-term breakthrough on the Strait of Hormuz.
- •WTI crude oil climbed nearly 5% to $82.08, with potential spillover effects on transport, shipping, and inflation-sensitive sectors if the disruption persists.
- •Gold reversed from a low of $4313 to trade near $4389, supported by US currency intervention efforts, a softer jobs report, and ongoing geopolitical conflict.
- •Reports linked Nvidia to a $500 billion structured finance loan tied to the hyperscaler buildout, pressuring its shares and highlighting market sensitivity to AI infrastructure financing needs.
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Markets:
WTI crude up $3.90 to $82.08
Gold up $46 to $4388
S&P 500 down 0.1%
US 10-year yields up 4.3 bps to 4.70%
GBP leads, JPY lags
The yen weakened sharply on Monday, giving back a large part of the gains it had made after intervention. USD/JPY rose more than 150 pips on the day on steady buying, and the pair pushed through 159.00 in US trading. That presents a challenge for Japan's finance ministry and the US Treasury, which have been trying to limit the move with only limited success so far despite a substantial intervention effort. Market attention will now turn to any comments as trading resumes in Japan.
The move also comes against a backdrop of a busy week for central banks and policymakers, with the market already parsing comments on the appropriate degree of policy restraint in the US and watching how officials in Japan respond to the currency move. For now, the foreign exchange session continues to be driven by intervention-related flows and official messaging rather than any single data release.
Elsewhere, markets are assigning a low probability to a breakthrough in Iran or a reopening of the Strait of Hormuz. Over the weekend, Trump appeared to abandon the military option and instead shift toward trying to pressure Iran through a blockade. Iran, in response, is expected to seek to keep oil constrained in the Strait and push crude prices higher. With oil up nearly 5% on the day, the economic costs are likely to rise quickly on both sides. Trump has now shifted from calling to “bomb the power plants” to demanding compensation, suggesting the standoff may continue for some time.
The oil move matters well beyond the energy complex, since higher crude prices can feed into transport, shipping, and inflation-sensitive parts of the market if the disruption persists. That is one reason the reaction has been closely watched across rates, currencies, and equities, even as traders remain focused on whether the situation changes through diplomacy or further pressure.
Gold also moved higher in a sharp reversal. The metal had fallen as low as $4313 before recovering to trade near the highs at $4389. The move was supported by the US intervening to weaken its own currency, Friday's softer jobs report, and the ongoing conflict, all of which have been acting as tailwinds. The price action remains strong.
In equities, an earlier report said Nvidia was linked to a $500 billion structured finance loan tied to the hyperscaler buildout, in what could be the largest private fundraise of all time. Details are starting to emerge, but the initial reports pressured Nvidia shares. The report also highlights how closely the market is watching the financing needs of the AI infrastructure buildout, where large capital commitments can quickly affect sentiment in major index names.