Global Markets Lose Steam as Traders Eye U.S. Data; Oil and Dollar Retreat

Global stock markets lost momentum on Thursday as the wave of optimism that had lifted investor sentiment earlier in the week began to fade.

The brief rally, fueled by positive developments in U.S.-China trade relations and significant investment deals from the Middle East during President Donald Trump’s Gulf tour, gave way to caution as traders awaited fresh economic data from the United States.

Asian markets reflected the shift in tone. MSCI’s broad index of Asia-Pacific shares outside Japan dipped slightly, with Japan’s Nikkei falling 0.85%, China’s CSI300 slipping 0.63%, and Hong Kong’s Hang Seng Index dropping 0.55%. Wall Street futures were marginally lower after modest overnight gains, signaling a pause in the upward momentum.

Market analyst Tony Sycamore from IG aptly described the mood: “We’ve had a huge party, everyone’s hung over, and now we’re just recuperating and waiting for the next big party.”

The sentiment appeared to echo across continents, as European markets also looked set for a subdued start. Futures for the EUROSTOXX 50, Germany’s DAX, and Britain’s FTSE indicated a cautious opening.

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In the commodities market, oil prices declined sharply amid speculation of a possible U.S.-Iran nuclear agreement. Brent crude and U.S. crude futures both dropped more than 2%, pulling back from recent gains as traders factored in the potential return of Iranian oil to global markets.

Meanwhile, in the bond market, U.S. Treasury yields edged higher, with the benchmark 10-year yield climbing to a one-month high. Investors expressed concern over the implications of President Trump’s proposed budget, which could significantly increase the U.S. national debt.

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The currency markets also saw movement, with the U.S. dollar losing ground after a strong start to the week. The greenback slipped 0.55% against the yen, settling at 145.99, while the euro inched higher to $1.1193, reflecting a modest recovery in confidence toward the common currency.

With the initial euphoria fading, all eyes are now on the next set of U.S. economic indicators for cues on market direction. For investors, the coming days may be less about celebration and more about strategy, as they navigate an increasingly complex global financial landscape.