HFMarkets (hfm.com): Market analysis services.

[HFM]

Date: 5th August 2026.

Stocks Surge as AI Rebounds and Falling Oil Reshapes the Forex Outlook.
 

Asian stock markets rallied sharply on Wednesday as investors returned to technology and semiconductor shares following a record-breaking session on Wall Street.

The recovery was supported by three developments that had previously weighed heavily on global risk appetite: oil prices continued to decline, government bond yields moved lower, and strong corporate earnings revived confidence in artificial intelligence-related investment.

Japan and South Korea led the advance, while gains in China, Australia, and other regional markets indicated that the improvement in sentiment was not limited to a single country.

For forex traders, however, the most important question is whether falling energy prices and bond yields can continue to weaken inflation expectations and reduce pressure on central banks to raise interest rates.

The S&P 500 gained approximately 1.8% on Tuesday and closed at a fresh record, while the NASDAQ Composite jumped around 2.6%. NVIDIA, Broadcom, and Micron were among the strongest performers as investors returned to semiconductor shares following the recent technology-sector correction.

NVIDIA gained more than 2% after Elon Musk praised the company’s processors and highlighted their potential role in SpaceX’s artificial intelligence and computing plans.

The comments reinforced expectations that spending on AI infrastructure, advanced processors, and data centres will continue to expand.

Nevertheless, the earnings reaction was far from universally positive.

AMD shares fell approximately 8.8% in after-hours trading even though the company reported record quarterly revenue of $11.5 billion, representing an increase of 50% from the previous year. Data centre revenue more than doubled, while AMD forecast third-quarter revenue of approximately $13 billion, plus or minus $300 million.

The sell-off suggests that strong growth alone may no longer be enough for highly valued AI companies. Investors increasingly expect earnings, guidance, and margins to exceed already elevated forecasts.

SpaceX also dropped around 7.5% following its first quarterly report as a publicly traded company. Concerns that heavy AI and infrastructure investment could consume cash flow overshadowed the company’s operational growth.

The next potential volatility event will arrive on Thursday, when up to 912 million shares held by employees and other pre-IPO investors are expected to become eligible for sale.


 

Japan and South Korea Lead the Asian Recovery

The positive momentum quickly spread across North Asia.

Japan’s Nikkei 225 advanced approximately 3.5%, while South Korea’s KOSPI rose more than 4%. SK Hynix gained nearly 7%, Samsung Electronics climbed around 4% and several Japanese semiconductor and electronic-component companies recorded strong gains.

MSCI’s index of Asia-Pacific shares outside Japan rose approximately 2.3%, while Chinese blue-chip stocks added around 1.5%. The Australian S&P/ASX 200 also reached a new record as financial and mining shares supported the index.

The regional rally represents a strong rebound from the recent AI-sector sell-off, but it does not necessarily mean that all concerns have disappeared. Investors are still evaluating whether the enormous amounts being invested in AI infrastructure will generate sufficient long-term returns.

China also faces an additional source of risk. The Trump administration is reportedly preparing restrictions on imports of new Chinese optical transceivers and other data centre components on national security grounds.

Shares of several Chinese optical-equipment manufacturers came under pressure following the reports, partially offsetting the wider semiconductor rally.

The most significant macroeconomic support came from oil.

Brent crude declined towards $79 per barrel, substantially below its July peak of approximately $102. West Texas Intermediate fell towards $75 as investors reacted to signs of progress in negotiations involving the United States, Iran, and Oman.

The proposed arrangement could establish a temporary 60-day system for reopening shipping routes through the Strait of Hormuz. Under the reported plan, inbound vessels would travel through a northern lane near Iran, while outbound vessels would use a southern route through Omani waters.

No final agreement had been officially confirmed at the time of writing. Previous negotiations have also collapsed, meaning traders should remain prepared for renewed geopolitical volatility.

The Strait of Hormuz is one of the world’s most important energy transit routes. Before the conflict, approximately one-fifth of the world’s oil supply passed through the waterway.

A sustained reopening would increase the flow of oil out of the Persian Gulf and reduce the geopolitical risk premium built into crude prices.

For forex traders, lower oil prices can have several important consequences:
 

• Reduced inflation expectations may decrease pressure on the Federal Reserve and other central banks to tighten monetary policy.
• Oil-importing economies and currencies may benefit from lower energy costs.
• Oil-exporting currencies could lose some support if crude prices extend their decline.
• Improved risk appetite may weaken demand for traditional safe-haven currencies.

Lower oil prices have already provided relief to government bond markets.

The US 10-year Treasury yield declined to approximately 4.60%, compared with a recent high of around 4.75%. Markets also reduced the estimated probability of a Federal Reserve rate increase in September to approximately 57%, down from 67%.

This repricing reflects expectations that lower energy prices could limit the inflationary impact of the Middle East conflict.

However, the Fed outlook remains uncertain. Kansas City Fed President Jeff Schmid recently argued that tighter monetary policy may still be necessary to return inflation to the central bank’s 2% target.

The combination of lower yields and improving equity sentiment placed modest pressure on the US Dollar.

EUR/USD traded close to $1.1540, near its highest level in approximately six weeks. USD/JPY slipped towards 157.60, although intervention risk remains elevated following last week’s rare coordinated Yen-buying operation by Japan and the United States.

Comments from US Treasury Secretary Scott Bessent were also interpreted as support for further monetary tightening from the Bank of Japan. Expectations of higher Japanese interest rates could provide additional support for the Yen, particularly if Japanese authorities remain willing to intervene.

The New Zealand Dollar underperformed after unemployment rose to 5.6% in the June quarter, its highest level in approximately a decade. The data may strengthen expectations that the Reserve Bank of New Zealand will adopt a more cautious monetary policy stance.

Gold gained approximately 1.6% and traded around $4,140 per ounce.

Ordinarily, a strong equity rally might reduce demand for defensive assets such as gold. However, the decline in Treasury yields supported the precious metal because gold does not offer interest payments and therefore tends to become relatively more attractive when bond yields fall.

A softer US Dollar also made gold less expensive for investors using other currencies.

Gold traders must now balance two competing forces. Further diplomatic progress in the Middle East could reduce safe-haven demand, but declining yields and lower expectations of additional Fed tightening could continue to support prices.


 

Attention now turns towards major US economic data that could determine whether the decline in Treasury yields and the US Dollar continues.

The July ADP private-employment report is scheduled for 12:15 GMT on Wednesday, followed by the ISM Services PMI at 14:00 GMT.

Traders should pay particular attention to the employment and prices components of the ISM report, as these may influence expectations for inflation and Federal Reserve monetary policy.

The more influential July nonfarm payrolls report will be released on Friday, 7 August, at 12:30 GMT.

A stronger-than-expected labour report could revive rate-hike expectations, push Treasury yields higher, and support the US Dollar.

A weaker report could reinforce the recent decline in yields, weigh on the Dollar and provide further support to gold and equity markets.

The Asian stock market rally rests on three improving conditions: continued AI investment, falling oil prices, and lower bond yields.

For the moment, these factors are supporting equities and reducing demand for the US Dollar. However, the outlook remains vulnerable to sudden reversals.

A breakdown in the Hormuz negotiations could send oil prices sharply higher again. Strong US employment or services data could revive expectations of further Fed tightening. Meanwhile, disappointing earnings or rising financing costs could renew concerns about the profitability of AI investment.

Forex traders should therefore monitor oil, Treasury yields, and technology shares together. Their interaction is currently shaping movements across USD/JPY, EUR/USD, commodity currencies, and gold more than any single market in isolation.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

[HFM]

Date: 6th August 2026.

Gold Posts Its Biggest Rise in Six Months: Can the Rally Continue?
 

Gold sees its largest bullish rise in six months as oil prices continue to fall. Crude oil prices have now fallen to $75.00, the lowest in almost four weeks due to a possible Oman-Iran agreement. According to Iran, an agreement has been reached but does not necessarily open the strait fully.

Gold is rising as investors expect lower oil prices to pressure inflation, meaning fewer interest rate hikes. As a result, investors can again invest in non-yielding assets such as Gold. However, this primarily depends on how low oil prices and inflation fall. 38% of analysts continue to expect the Federal Reserve to hike twice this year, while 43% believe it will hike once.

As a result, the price of oil and next week’s inflation rate will primarily determine if Gold’s momentum will continue.

Crude Oil - Iran and Oman Reach a Temporary Agreement on The Strait of Hormuz

Oman and Iran have come to an agreement to safely open the strait to certain ships. However, Iran has also said the deal will proceed if ‘certain parties do not obstruct the process’. Here, Iran is referring to the US, which is holding separate talks with Iran.

Oil prices are falling based on the news of the agreement. However, investors should note that the agreement is relatively weak. The agreement only covers a limited number of ships through a small route. In addition to this, the US continues to block the strait to Iran. For this reason, market analysts remain cautious about any positive news while the US does not have an agreement in place with Iran.

In the past two weeks the price has fallen by 21% but based on historic correlations between oil prices and inflation, this is not enough to pressure inflation. The Federal Reserve is looking to push inflation to 2%, with inflation currently at 3.5%.

As a general rule, most economists believe that if oil prices remain 10% lower than their previous price, inflation falls by a maximum of 0.40%. So far, inflation has fallen by 20% meaning a further 10% is needed to bring inflation down to its target. Therefore, oil would need to fall to $66 per barrel and remain there for some time in order for inflation to fall to 2%. Otherwise, the Federal Reserve is likely to continue considering interest rate adjustments.

Currently, the price of Crude Oil is struggling to cross below the support level of $74.40. Over the past 24 hours three attempts have been seen. However, the price action will largely depend on the US and Iranian negotiations. If the price breaks below the support level, technical analysts will maintain a bearish bias, targeting the psychological $70.00 level next, followed by support at $68.00.
 

HFM - Crude Oil 30-Minute Chart

Gold - Importance of Inflation

Gold prices saw a significant surge on Wednesday in response to lower oil prices, a weaker Dollar and hopes that this could lower inflation. However, this cannot yet be known, as demand and the employment sector remains resilient.

On Wednesday, three members of the Federal Reserve spoke to journalists about monetary policy. All three generally sounded hawkish and willing to hike interest rates.
 

Neel Kashkari, Minneapolis Fed President - ‘Now is the time to start slowly moving up as we get more data in.’

Lisa Cook, Fed Governor - ‘If I do not see signs of disinflation soon, I am willing to act.’

Mary Daly, San Francisco Fed President - ‘The answer there is be vigilant, to watch the inflation as it comes in, but be very prepared to take action.’

Tomorrow’s NFP data will trigger volatility for Gold and the US Dollar, however, the inflation rate next week will be more influential. Stronger NFP data and higher inflation are likely to weaken Gold, while weaker data could fuel a medium-term rise.

Gold’s technical outlook remains cautiously bullish in the short term. The price is trading above its 50-day moving average, and momentum indicators continue to strengthen. Immediate resistance is located around $4,300, and a break above this price could indicate a further rise. On the downside, traders may first target the $4,220–$4,200 support zone, followed by the more significant $4,157 level.

As long as gold remains above $4,160, bearish signals are avoided; however, a rejection from $4,300 and a break below this support would weaken the bullish structure.
 

HFM - Gold 30-Minute Chart
 

Key Takeaway Points:

• Gold posted its strongest six-month rally as oil prices and the US Dollar declined.
• The temporary Oman-Iran agreement pushed crude oil towards $75, but the deal remains limited and uncertain.
• Oil may need to fall towards $66 and stay there to significantly reduce inflation pressure to the Fed’s target.
• Gold’s next major catalysts are the US jobs report and next week’s inflation data.
• Gold remains cautiously bullish above $4,160, with resistance near $4,300.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HFM Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding of how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Michalis Efthymiou
HFMarkets

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.