Markets displayed mixed behaviors on Tuesday, with equities climbing to fresh record highs while bitcoin, gold, and oil prices fell despite broad U.S. dollar weakness.
Technology megacaps continued their advance as investors looked forward to major earnings reports and assessed the implications of Microsoft’s expanded OpenAI partnership, while geopolitical tensions in the Middle East and questions about fiscal policy in multiple regions provided an undercurrent of caution.
Check out the forex news and economic updates you may have missed in the latest trading session!
Headlines & Data:
- U.S. President Trump praised Japan’s new Prime Minister Takaichi during his visit, pledged increase cooperation
- Japan’s minister for growth strategy, Minoru Kiuchi, said on Tuesday that authorities will monitor the impact of yen weakness on the economy
- Germany GfK Consumer Confidence for November 2025: -24.1 (-23.0 forecast; -22.3 previous)
- ECB Consumer Inflation Expectations for September 2025: 2.7% (2.7% forecast; 2.8% previous)
- U.S. S&P/Case-Shiller Home Price for August 2025: -0.6% m/m (-0.1% m/m forecast; -0.3% m/m previous); 1.6% y/y (2.1% y/y forecast; 1.8% y/y previous)
- U.S. House Price Index for August 2025: 0.4% m/m (0.0% m/m forecast; -0.1% m/m previous); 2.3% y/y (1.5% y/y forecast; 2.3% y/y previous)
- U.S. Richmond Fed Manufacturing Index for October 2025: -4.0 (-10.0 forecast; -17.0 previous)
- U.S. CB Consumer Confidence for October 2025: 94.6 (93.0 forecast; 94.2 previous)
- U.S. Dallas Fed Services Index for October 2025: -9.4 (-3.0 forecast; -5.6 previous)
- On Tuesday, Israeli Prime Minister Netanyahu ordered strikes against Hamas in Gaza after attacks on Israeli troops
Broad Market Price Action:
Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView
Tuesday’s session saw mixed sentiment and weak correlations as traders balanced mixed economic signals and renewed geopolitical concerns in the Middle East, along with positioning ahead of major central bank meetings and big tech earnings reports.
The S&P 500 extended its rally, closing just above the 6,800 handle for another record high, gaining approximately 0.25%. The index received support from technology megacaps, with the Magnificent Seven group advancing 1.3%. Microsoft’s announcement of a new pact with OpenAI that gives the software giant a 27% ownership stake worth approximately $135 billion helped fuel optimism about continued AI investment. Apple briefly crossed the $4 trillion market capitalization threshold during the session.
Gold continued its pulled back from recent highs after initially bouncing higher at the Asia open before reversing to the downside. Traders found the intraday bottom mid-morning London trade, likely finding support on Federal Reserve rate cut expectations and ongoing concerns about fiscal sustainability across developed markets.
WTI crude oil declined 2.19% to close around $59.80 per barrel, continuing its downward trajectory. There were no major updates from OPEC, so it’s likely this continued sentiment from recent rising U.S. crude inventories and reports suggesting OPEC+ may consider additional production increases, which appears to outweigh fresh news of Netanyahu’s orders for strikes in Gaza, raising geopolitical tensions.
Bitcoin declined 0.66% to trade near $113,671, retreating after recent gains. The cryptocurrency showed weakness during both the Asian and U.S. trading sessions. There were no major apparent crypto related news to point to, and since we didn’t see a rally with tech stocks, this suggests this pullback may have been cautious repositioning ahead of the Fed’s interest rate decision tomorrow.
The 10-year Treasury yield declined 0.13% to trade around 4.00%, falling as bond buyers emerged ahead of Wednesday’s Federal Reserve meeting. Markets have fully priced in a 25-basis-point rate cut, with attention focused on Chair Powell’s commentary regarding the policy outlook given the lack of official economic data due to the ongoing government shutdown.
FX Market Behavior: U.S. Dollar vs. Majors:
Overlay of USD vs. Majors Chart by TradingView
The greenback opened Tuesday’s Asian session under pressure, declining broadly against major currencies. There were no major U.S. data catalysts to point to, so it’s possible this was a reaction to Japanese yen strength, which was likely a reaction to comments from Japan’s minister for growth strategy, Minoru Kiuchi, who said that authorities will monitor the impact of yen weakness on the economy (basically hinting at possible intervention if necessary). The yen may have also drawn in net buying from the meeting between U.S. President Donald Trump and Japanese Prime Minister Sanae Takaichi, where they pledged to increase defense funding and cooperation.
The London morning session brought a reprieve for the dollar, with the greenback recovering some ground against most majors. There were no notable catalysts to point to, so this was likely positioning ahead of upcoming U.S. economic and survey releases.
The U.S. session marked the dollar’s second reversal of the day, with renewed selling pressure emerging around 9:00 a.m. EST. Mixed U.S. economic data provided little clear direction, as consumer confidence exceeded expectations at 94.6 versus a forecast of 93.0, while home price data showed continued softening in the housing market. The S&P/Case-Shiller Home Price Index annual growth rate slowed to 1.6%, missing the 2.1% forecast and marking the weakest gain in over two years.
Given the data outcome, the dollar’s weakness may have been a mix of risk-on sentiment from U.S. equities, and possibly some positioning ahead of Wednesday’s Federal Reserve decision, where a 25-basis-point rate cut is widely expected, leading to a net negative performance from the Greenback on the session.
Upcoming Potential Catalysts on the Economic Calendar
- Australia CPI for September 2025 at 12:30 am GMT
- Japan Consumer Confidence for October 2025 at 5:00 am GMT
- Swiss Economic Sentiment Index for October 2025 at 9:00 am GMT
- U.K. Monetary Developments for September 2025 at 9:30 am GMT
- U.S. MBA 30-Year Mortgage Rate & Applications for October 24, 2025 at 11:00 am GMT
- U.S. Goods Trade Balance Adv for September 2025 at 12:30 pm GMT
- U.S. Retail Inventories Ex Autos MoM Adv for September 2025 at 12:30 pm GMT
- U.S. Wholesale Inventories MoM Adv for September 2025 at 12:30 pm GMT
- Bank of Canada Interest Rate Decision & Monetary Policy Report for October 29, 2025 at 1:45 pm GMT
- U.S. Wholesale & Retail Inventories for August 2025 at 12:30 pm GMT
- U.S. Pending Home Sales for September 2025 at 2:00 pm GMT
- Bank of Canada Press Conference at 2:30 pm GMT
- U.S. EIA Crude Oil Stocks Change for October 24, 2025 at 2:30 pm GMT
- FOMC Federal Funds Rate & Monetary Policy Statement for October 29, 2025 at 6:00 pm GMT
Wednesday’s calendar features two major central bank decisions that will dominate market attention. The Bank of Canada announces its rate decision at 1:45 pm GMT, with most analysts expecting a 25-basis-point cut to 2.25%, though the decision appears finely balanced given persistent core inflation concerns.
The Federal Reserve follows at 6:00 pm GMT, where a 25-basis-point reduction is fully priced in by markets. Chair Powell’s press conference will be scrutinized for guidance on the pace of future cuts, particularly given the lack of official economic data due to the ongoing government shutdown. Any signals about potentially ending quantitative tightening could significantly impact Treasury markets and the dollar.
But before the main events, Australian inflation data overnight will likely provide crucial insight into the Reserve Bank of Australia’s policy path, with markets watching for signs that price pressures continue to moderate.
Meanwhile, developments on the U.S.-China trade front remain in focus ahead of Thursday’s planned meeting between President Trump and President Xi Jinping in South Korea, following the framework trade agreement announced earlier this week. Reports suggesting potential U.S. concessions on tariffs in exchange for Chinese action on fentanyl precursor exports could influence risk sentiment. Signs of political movement toward ending the U.S. government shutdown may also affect market dynamics, particularly for data-dependent traders navigating the current information vacuum.
Stay frosty out there forex friends and don’t forget to check out our Forex Correlation Calculator when taking any trades!
