US Equities Find Resistance Despite US/China Talks

(MENAFN- Mid-East Info) Equities face some renewed downside as focus shifts to the US PCE data

Gold continues to shine bright as risks increase

By Daniela Sabin Hathorn, senior market analyst at Capital

US equity markets are starting the week off with some resistance after a strong performance last week backed by the Federal Reserve's affirmation to continue cutting rates. Asian markets have failed to benefit from the US/China talks over the weekend, with the outcome seen as constructive but lacking substance. The event produced warmer optics and kept leader-level talks on the table for autumn, but there were no concrete steps on tariffs or export controls. The focus this week has shifted to the PCE data to be released on Friday, with equity markets still showing complacency towards an ultra-dovish Fed (especially after Powell's term is over in May next year). A hotter print could shift the balance of risks, with equities possibly facing another round of correction.

Elsewhere, gold continues to grind higher as appetite for the precious metal strengthens. The lower rate environment is likely to continue being a tailwind alongside a possible government shutdown in the US at the end of the month, which is increasing the risk premium in US assets. The outlook looks positive both in the short and long-term, however, some corrective moves may be on the table as the technical start to show the rally has become over-extended past the 3,700 level.

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Past performance is not a reliable indicator of future results.

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