Gold up $81, S&P 500 gains 1.1% as dollar slides

Market recap:

• Gold rose $81 to $4343
• US 10-year yields fell 9 basis points to 4.93%
• WTI crude oil dropped $1.29 to $101.14
• The Australian dollar was the top performer, while the US dollar was the weakest
• The S&P 500 added 1.1%

Stocks and gold reversed the moves seen after the Federal Reserve meeting, as market participants re-evaluated the inflation outlook and shifted their focus. The catalyst was a drop in Treasury yields, which reduced worries about the central bank losing its independence and about runaway inflation. It took time to fully absorb the meeting, but the tail risks now appear to have been removed, or set aside for the moment. The Federal Open Market Committee still has its experienced members, and they voted unanimously despite their differences.

The dollar did not retrace its earlier gains and gave little back during the day. One factor could be money flowing back into technology stocks after a major risk passed. Intel jumped on news of a potential partnership with NK Hynix for US memory chip manufacturing. Generac surged 18%, highlighting an expanding artificial intelligence boom, while Micron also climbed in a return to names that performed well earlier this year.

Part of the improvement was supported by reports that the Trump administration will meet with Gulf countries to try to end the war. In his comments, Trump appeared resigned to some kind of conclusion, though he also spoke about annihilating the regime — something he already attempted in March. The headlines put slight downward pressure on oil, but the days when every statement from Trump on the conflict moved crude by $3-$5 are over. For now, a day of steady oil prices was a positive development.

Economic data showed that housing will struggle with higher rates, providing one reason to think the hiking cycle will be short. However, initial jobless claims remain at extremely low levels, pointing to why the cycle could last.