Is the party over already? – North American Session Market Wrap for May 7

Log in to today's North American session Market wrap for May 7

Markets jumped to new highs early this morning as investors felt hopeful about diplomatic progress. But by midday, those gains disappeared. It became clear that risk assets had risen too quickly, and overall sentiment turned negative.

Tensions in the Gulf quickly returned, pulling markets back down. Optimism faded after reports that Iran had fired missiles at US Navy destroyers, apparently in response to US strikes on Iranian tankers. Iranian state TV also reported anti-aircraft activity and explosions over Tehran, adding more uncertainty to the trading floor.

Confusion about the blockade added to the day’s volatility. A US official told Al Jazeera that reports about the US military preparing to restart “Operation Freedom,” the mission to reopen the Strait of Hormuz by force, were completely false. These conflicting stories made WTI crude oil prices swing wildly, eventually pulling them back down toward $95.

Stocks could not hold up after the reversal. Both the S&P 500 and Nasdaq reached impressive new intraday highs at 7,385 and 28,850 but lost momentum and ended the day lower.

The Dow Jones also dropped more than 300 points, falling below the 50,000 mark by the close.

With the peace rally over and geopolitical tensions rising again, tomorrow’s important Non-Farm Payrolls (NFP) report could be a major turning point for Wall Street as investors look for direction.

Read More:

• Have Stock Markets met their top? – Pre-FOMC Dow Jones, Nasdaq and S&P 500 Levels
• Crude Oil on path to $90 as the peace trade continues – WTI Technical analysis
• Chart alert: Gold (XAU/USD) rally faces roadblock at 20-day and 50-day moving averages

Global assets took a huge turn around the middle of the session with WTI Crude largely reversing from its huge drop to $90 – Spot the turn around 10:30.

FX is back into a large confusion after today's US Dollar reversal along with Crude Oil.

The King Dollar is back on the top of the FX board at the end of the session, with the DXY back above 98.00 and exploding after forming a triple bottom.

Tomorrow welcomes the infamous NFP session along with Canadian Employment.

This will come along with many other smaller tier data releases but the 8:30 A.M ET release will be the largest mover of the session (barring some fundamental news regarding the Iran conflict).

As always, make sure to follow talks around US-Iran negotiations.

Safe Trades!

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