U.S. Indices Hit Record Highs on Trade Optimism, Safe-Haven Slipped

The recent landscape of U.S.–Japan trade deal has bolstered the global markets sentiment. Japan agreed to reduce auto tariffs to 15% from 27.5%, backed by a $550 billion investment package, lifting the Nikkei to a one-year high (+3.3%) as Japan automakers stocks rallied 13–17%.

This breakthrough has boosted expectations of similar agreements with the EU and other economies. In the U.S., stock futures climbed on optimism and hopes of further progress.

Global Market Moves: U.S. Stocks Hit Record Highs

Following the news, U.S. stock indices further extended their rally during the U.S. session—with the S&P 500 and Nasdaq hitting fresh record highs, while the Dow Jones edged closer to its historical peak.

European markets surged as well, buoyed by the Japan deal and growing optimism over a potential future U.S.–EU trade agreement. The UK FTSE (UK100) is on track for a five-week winning streak, reaching 9,112 points—a record high.

Capital Flocks Away from Safe Havens

On the other hand, safe-haven assets such as gold and U.S. Treasury bonds slipped in Wednesday’s session. U.S. Treasury yields reversed a three-day downtrend amid renewed risk-on sentiment, with 10-year yields rising to 4.39%.

Gold retreated from its five-week highs as investors rotated back into equities, slipping below the $3,400 mark shortly after reclaiming it on Tuesday. The move signals that investor sentiment remains firmly tilted toward risk-on assets at this stage.

What’s Next for Gold and Yields?

With risk appetite returning to the forefront, investors are now watching cautiously on both gold and U.S. Treasury yields—the safe-haven asset—to gauge whether recent moves would signal a short-term pullback or the start of broader trend reversal.

As market sentiment shifts in response to trade optimism, both the gold and 10-year Treasury yield charts are approaching critical zones that could shape the next leg of market direction.

Gold (XAU/USD): Stay on Broad Sideways

XAUUSD, Day-Chart Analysis | Source: Ultima Market MT5

Gold (XAU/USD) continues to face resistance near the $3,440 level—a key barrier that has capped multiple rallies since its record-breaking surge in April 2025. Despite briefly reclaiming ground above $3,400 earlier this week, price action quickly reversed the gains.

Wednesday’s sell-off suggests that bullish momentum may be fading, especially as broader market sentiment shifts back toward risk-on assets amid progress on trade deals.

If optimism persists—particularly around the U.S.–EU trade front—gold could stay sidelined.

US 10-Year Treasury Yield (USNote10Y): Under Pressure Amid Risk-On Rotation

Demand for U.S. Treasuries weakened on Wednesday as capital rotated into risk assets like equities, following renewed trade optimism. The USNote10Y slipped further, reflecting softening safe-haven demand.

USNote10Y, 4-H Chart Analysis | Source: Ultima Market MT5

Technically, the yield remains under pressure within a broad range, with limited upside as long as the prevailing risk-on sentiment holds.

Continued strength in equities—driven by trade breakthroughs—may keep Treasury yields subdued, as investors favor growth-sensitive assets over defensive plays.

What’s Next to Watch?

Markets are riding a wave of optimism fueled by trade breakthroughs and solid earnings. But with the EU negotiations and the August tariff deadline ahead, volatility could quickly return if talks falter. Treasury yields, global equities, gold, and FX are all vulnerable to these unfolding developments—keep a close watch.

In the U.S., tech earnings (Tesla, Alphabet) and future Fed commentary remain key near-term drivers

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