Mid-Market Update: Stocks rise again, WTO rules against US tariffs, Oil rises, Gold softens

The Nasdaq continues to lead the stock market rally as investors brace for another Fed meeting that could deliver a dovish surprise. Following Jackson Hole, the Fed’s new framework allows them to take a pass at this meeting, but not all investors are betting on that.  The Fed will likely reiterate the need for Congress to do more and moderate their forecasts which have already seen inflation and the labor market rebound run hotter than what was forecasted in June.  The Fed will be unable to be optimistic about the recovery until they see how the economy performs when the second wave of the coronavirus hits.  The labor market has improved better-than-expected but most of the momentum has faded.  Powell will likely remain downbeat and that might be enough to keep risky assets supported.        

While the mega-cap tech stocks are stealing most of today’s headlines, real estate and utilities are leading the charge higher.  The rotation into cyclicals is very positive long-term for stocks and this rally is starting to see significant gains in real estate, materials and consumer stocks. 


Crude prices whipped around on mixed global economic data, another downbeat oil market report, and as a handful of tropical storms appear poised to lead to further disruption of refinery operations and gasoline distribution.  The crude demand outlook is mixed with China’s economic recovery accelerating, while the US is clearly showing signs that momentum has stalled. 

WTI crude is likely to continue consolidating ahead of both the Fed policy decision and OPEC’s joint ministerial monitoring committee meeting on Thursday.  It is hard to get excited about higher oil prices as the demand outlook remains shaky due to winter virus wave fears and as the OPEC+ alliance seems to be falling apart as cheaters secure more market share. 


Gold prices turned negative after the WTO said the US violated international trade rules with China.  Gold wasn’t going to break above the $2000 level before the Fed so investors used the WTO headlines as an excuse to head for the sidelines.  While the Trump administration can effectively veto the WTO decision by filing an appeal over the next two months, the ruling will likely restrict ‘tariff man’ from relentless protectionism. 

Gold trading will likely remain choppy until after the Fed policy decision, which should justify rates will remain near zero for the foreseeable future.  The Fed is not likely ready to enhance forward guidance, but if they do that could spell trouble for the dollar and send gold soaring.  If the Fed tweaks their asset purchase program, that could be all that is needed to send gold higher.  

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Ed Moya

Ed Moya

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023.

His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies.

Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news.

Based in New York, Ed is a regular guest on several major financial television networks including CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal.

Ed holds a BA in Economics from Rutgers University.