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US stock markets rose strongly yesterday. The Dow Jones Industrial Average gained 0.71%, the S&P 500 Index rose 1.49%, and the Nasdaq Composite advanced 2.26% to close at a record high of 27,122.09. The rally was driven principally by technology and AI-related shares, while lower oil prices and a fall in Treasury yields improved overall risk sentiment.
Asian equity markets are following Wall Street higher. Technology shares have led the move, and the improved mood reflects hopes of progress in US-Iran discussions, lower energy prices than last week’s peak, and increased optimism ahead of the planned Trump-Xi meeting.
Bitcoin has made a major bullish breakout. Bitcoin surged above $87,000, its highest price since late January, before settling back near $85,000–$86,000. It is up by approximately 5% to 6% over 24 hours and more than 10% over the past week. The breakout above the important $82,000 area is technically significant, but Bitcoin now needs to hold above that former resistance zone to confirm the move.
Several major cryptocurrencies have broken to multi-month highs. Bitcoin, Ethereum, Solana, and BNB have all traded above every price level reached during the previous 90 days. Ethereum is near $2,770, Solana near $119, BNB near $798, and XRP near $1.53. This is a notably broad crypto rally rather than one driven only by Bitcoin. Trend following funds will be long of several of these cryptocurrencies, most of which can be traded as micro futures on the CME.
The Trump-Xi summit could support risk appetite further. Chinese President Xi Jinping will visit Washington from Wednesday to Friday and meet President Trump on Thursday. Markets will be watching for an extension of the US-China tariff truce, which expires on 10 November, and for any agreement to reduce tariffs on non-strategic goods. Positive progress would support global equities, cryptocurrencies, and potentially Soybeans, while failure to reach an agreement could reverse some of the recent risk-on rally. Soybeans futures are very close to a long-term bullish breakout. The best-known Soybeans ETF, SOYB, is more affordable than Soybeans futures.
In the Forex market, the US Dollar remains firm. The Dollar Index is near 100.4, close to its seven-week high, and at a pivotal point of resistance, as Federal Reserve officials have continued to indicate that another interest rate hike may be needed. Markets are now pricing roughly a 56% probability of a further 0.25% rate hike at the October FOMC meeting, up from approximately 43.5% one week ago.
The Japanese Yen is weak again after its moments of glory last week. The USD/JPY currency pair is trading near 157.50 after the Bank of Japan disappointed markets last Friday by not providing clearly hawkish guidance on the pace of any further tightening. The pair is approaching the 158.00 area, which will be an important technical and psychological resistance level, especially given the risk of verbal or actual intervention by Japanese authorities.
Crude oil is still elevated but has eased sharply from last week’s peak. Brent Crude is near $101, and WTI is near $93, after oil posted a fourth consecutive daily decline. Lower crude oil prices are supporting stock-market and cryptocurrency risk appetite, but the Middle East situation and shipping through the Strait of Hormuz remain major risks which could quickly reverse this pullback.
It is a public holiday in Japan today.