Market Wrap US-Europe 5 August: Nasdaq Slips 0.8 Percent as Gold Extends Surge

By The Edge Research Team

US stocks paused on Wednesday after two days of strong gains, with technology slipping while the Dow Jones Industrial Average edged higher, as gold extended its surge and oil steadied. The Nasdaq Composite eased 0.83 percent and the S&P 500 slipped 0.17 percent, while the Dow added 0.49 percent to 54,349.12, per CNBC. Europe closed mixed, and the volatility index fell 4.18 percent to 15.81.

Wall Street consolidated after the sharpest two-day advance in weeks. The Nasdaq Composite eased 0.83 percent to 26,363.44 and the S&P 500 slipped 0.17 percent to 7,723.55, while the Dow Jones Industrial Average rose 0.49 percent to 54,349.12, per CNBC, as investors rotated from the technology leaders that had powered the rally into value and industrial shares. The drop in the volatility index to 15.81 alongside the pause suggests the session read as consolidation rather than retreat, our reading.

Europe closed mixed and little changed. Britain’s FTSE 100 edged up 0.08 percent to 10,888.30 and France’s CAC 40 added 0.03 percent to 8,669.30, while the Euro Stoxx 50 eased 0.15 percent to 6,476.98 and Germany’s DAX slipped 0.29 percent to 26,126.30, per CNBC.

In commodities, gold extended its surge while oil held its floor. Gold jumped 3.72 percent to 4,307.00 dollars an ounce, its second straight day of strong gains, per CNBC, as the dollar softened and Treasury yields edged lower. Brent crude was little changed at 79.28 dollars a barrel, down 0.10 percent, and West Texas Intermediate eased 0.99 percent to 75.02 dollars, stabilising after the roughly 10 percent two-session drop that followed the OPEC+ decision to raise September output.

In currencies and crypto, the dollar softened. The euro firmed to 1.1552 and sterling to 1.3463, while the yen was little changed at 157.75 per dollar, per CNBC. The US 10-year Treasury yield edged down to 4.615 percent. The Egyptian pound held firmly below the 50 line at 49.75 per dollar, while Bitcoin rose 1.02 percent to about 64,918 dollars.

Further east, Wednesday’s closes from our MENA-Asia wrap showed every Gulf market higher, led by Qatar’s 0.88 percent gain and Dubai’s close above the 6,000 line, while Asia surged with South Korea’s Kospi up 3.76 percent and Japan’s Nikkei 225 up 3.66 percent, per CNBC and the regional exchanges.

Why it matters: A consolidation on Wall Street after two strong days, with volatility falling rather than rising, keeps the global backdrop supportive for the Gulf, our reading. The rotation out of technology did not disturb the broader risk recovery, and the region enters Thursday with every Gulf benchmark having closed higher on Wednesday. Gold above 4,300 dollars lifts the value of regional central banks’ gold holdings for a second day, oil steadying near 79 dollars on Brent stabilises the producer revenue outlook for Saudi Arabia, Kuwait, the UAE and Oman, and softer Treasury yields ease dollar-linked financing costs across the region. For Egypt and Jordan, oil well below last week’s levels alongside a firmer pound eases the import bill.

Outlook: The week now funnels into Friday’s July US jobs report, our reading. A soft print would extend the falling-yield, weaker-dollar backdrop that has lifted both gold and risk assets, while a strong one would test the rally and the metals surge alike. The other markers are whether oil holds the 79 dollar area on Brent and whether the technology pause deepens or resolves higher. For the Gulf, the combination of a steady global backdrop and the region’s own momentum, with every market green on Wednesday, leaves it well positioned into the end of the week.

Table US equities, 5 August close, ranked by change:

Table Europe equities, 5 August close, ranked by change:

Table MENA and Asia, 5 August closes, for reference, ranked by change:

Table Commodities, 5 August, ranked by change:

Table Currencies, rates, volatility and crypto, 5 August, ranked by percent change:

Sources: CNBC; Reuters.

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