Market Analysis - 09/01/26

US Stocks Mixed Again Ahead of Non-Farms

US equity markets were mixed overnight as investors awaited today’s key US employment data. The Dow Jones added 0.55% to close at 49,266, while the S&P 500 was essentially flat, edging up 0.01% to 6,921, while the Nasdaq lagged, falling 0.44% to 23,480. Meanwhile, the US dollar strengthened, with the Dollar Index rising 0.18% to 98.85, and US Treasury yields climbed modestly, with the 2-year up 1.9 basis points to 3.488% and the 10-year up 2.0 basis points to 4.167%. Oil prices surged to two-week highs, reflecting renewed supply concerns from Russia, Iraq, and Iran, as well as ongoing attention on Venezuela. Brent crude jumped 4.67% to $62.78, while WTI rose 4.43% to $58.47. Gold also edged higher, gaining 0.47% to $4,477.65 amid rising geopolitical tensions and defensive flows.

Oil Volatility Set to Continue in the Coming Days and Weeks

Oil prices surged strongly overnight to hit two-week highs as volatility remained high in the market, with geopolitical factors pushing ‘Black Gold’ on big percentage moves on a daily basis at the moment. Developments in the situation in Venezuela are the main driver, but other factors also contributed to squeezing short positions in trading yesterday, which helped to increase the size of the rally. A Russian oil tanker suffered a drone attack in the Black Sea, and Iraq approved plans to nationalise some operations; these updates increased trader concerns. The market had been pricing in potential supply increases over the next couple of months, but yesterday's updates swiftly erased those moves, and now traders are preparing for further moves in the coming days and weeks. WTI is now sitting just under technical resistance near $59, while support is now back down near Wednesday’s lows at $55.76 a barrel.

First Non-Farm Friday of the Year Ahead for Traders

It is the first Non-Farm Friday of the year and a welcome return to ‘normal’ conditions after the US government shutdown disrupted usual data distribution over the last few months. Traders are bracing for today’s US labour market releases, including Non-Farm Payrolls, Average Hourly Earnings, and the Unemployment Rate, which are expected to drive volatility once New York opens. The headline NFP number is expected to come in around the +60k region, and traders are expecting to see a strong reaction to anything +/- 20k around that number. Average Hourly Earnings are expected to show a 0.3% month-on-month increase, with the unemployment rate dropping to 4.5%. Ahead of the data, trading is likely to remain subdued during the Asian and European sessions.