Nasdaq 100 Jumps but Dollar Drop Dissipates as Yields Bounce

Also 30-year T-bond, silver, crude oil and euro futures

1. Nasdaq 100 E-mini futures (/NQ): +0.96% 
2. 30-year T-bond futures (/ZB): +0.06% 
3. Silver futures (/SI): +2.54% 
4. Crude oil futures (/CL): +0.62% 
5. Euro futures (/6J): +1.19% 

A drop today by the U.S. dollar has been helping to prop up risk assets and USD-denominated commodities. The Nasdaq 100 is leading the way higher among equity markets, all of which are up across the board at the start of the week. Treasuries, which were trading higher earlier, have started to lose gains and turn lower around the start of the U.S. cash equity open. Metals are firmer all around, as are energy markets. 

U.S. equity market futures are four for four in the green today, with the Nasdaq 100 (/NQH5) and Russell 2000 (/RTYH5) racing out to gains of around 1%. Of note, semiconductor stocks appear to be leading the way once again, with Nvidia (NVDA) up by more than 3% and the Semiconductors ETF (SMH) breaking the downtrend from the July, November and December 2023 highs. Note: with futures markets truncated on Thursday for the funeral of President Jimmy Carter, options set to expire on Jan. 9 will now expire on Jan. 8. 

Treasuries raced higher overnight, perhaps because of the relative yield appeal they afford compared to their Asian or European counterparts. But the approaching North American trading hours have seen a stark change of pace, with Treasuries beginning to pare their gains across the curve, and in the limited period between recording daily performance (charts, percentage change) and writing this section, Treasuries have turned red across the board. Ahead of the December U.S. jobs report on Friday, there are three auctions worth watching: three-year notes tomorrow, 10-year notes on Wednesday and 30-year bonds on Thursday. 

The turnaround in U.S. yields is proving too heavy a burden for metals to ignore today. While initially surging overnight, leaders copper (/HGH5) and silver (/SIH5) have cut their gains in half. A busy global macroeconomic calendar over the coming days portends a week of meaningful two-way action for all metals. 

Crude oil futures (/CLG5) rose to their highest level since mid-October after this morning’s gains pushed the commodity up, extending last week’s upward price action. A weaker U.S. dollar helped clear some upside for the commodity amid a cold snap sweeping the United States that is driving up demand for energy. Saudi Aramco, one of the world’s largest exporters, raised its prices for c rude deliveries for February, marking the first increase in three months. That signals stronger demand expectations, which are likely coming from China where increased stimulus measures are manifesting.  

Euro futures (/6EH5) rose today against a weaker dollar after President-elect Donald Trump considers more targeted tariff measures, according to a report from the Washington Post. While the tariffs will likely be broad in targeting many countries, the specific actions are likely to target only certain sectors of trade that are critical to national and economic security. That is seen as a positive for Europe’s economy, as well as other countries, with the dollar falling against other major currencies.  

Christopher Vecchio, CFA, tastylive’s head of futures and forex, has been trading for nearly 20 years. He has consulted with multinational firms on FX hedging and lectured at Duke Law School on FX derivatives. Vecchio searches for high-convexity opportunities at the crossroads of macroeconomics and global politics. He hosts Futures Power Hour Monday-Friday and Let Me Explain on Tuesdays, and co-hosts Overtime, Monday-Thursday. @cvecchiofx

Thomas Westwater, a tastylive financial writer and analyst, has eight years of markets and trading experience. @fxwestwater

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