A ceasefire was implemented between Israel and Lebanon, and Trump hinted that the conflict with Iran was nearing its end, putting pressure on the dollar and causing gold to rebound.
2026-06-04 19:38:18
On Thursday (June 4), global risk sentiment showed a significant recovery. Israel and Lebanon formally announced a ceasefire agreement, injecting a strong stabilizing agent into the ongoing turmoil in the Middle East and effectively curbing previous market concerns about the situation spiraling further out of control.
On Wednesday, Iran launched a new round of missile and drone attacks on US bases in Kuwait and Bahrain in retaliation for US strikes on Iranian oil tankers and the Qeshm Island military base. This exchange of fire is considered the largest since the ceasefire in April. Despite this, diplomatic efforts have not ceased, and the ceasefire agreement reached between Israel and Lebanon has provided crucial support to the weary peace process.
Even more impactful news came from the White House. Trump delivered a new speech, declaring on social media that a US-Iran peace agreement was "basically agreed upon," and stating that details would be "released soon." This immediately triggered a new wave of safe-haven buying. The US dollar index subsequently fell sharply, while gold prices surged by over 1.2%, becoming the most obvious winner in the market that day.
However, beneath the optimism, undercurrents remain. The core focus of the Iran-US negotiations remains on key issues such as the reopening of the Strait of Hormuz, the disposal of Iran's highly enriched uranium, the lifting of sanctions, and restrictions on its nuclear and ballistic missile programs. Iran insists that any agreement must include the complete withdrawal of Israeli troops from Lebanon. Trump, on the other hand, prefers to address the two issues separately, and whether a breakthrough can be achieved remains uncertain.
Crude oil: War premium eases
WTI and Brent crude oil futures both fell by more than 2% today, erasing most of yesterday's gains. Previously, oil prices had briefly broken through the $100 mark, causing inflation expectations to surge and making the monetary policy paths of major central banks more unpredictable.
The market is currently caught in a dilemma: on the one hand, there are concerns that a renewed breakdown in the peace process could trigger a surge in oil prices; on the other hand, there is a reluctance to bet on high oil prices again now that negotiations are showing signs of improvement. The market generally considers $100 per barrel a key level—a break above this level would mean renewed inflation, while a sharp drop would suggest that geopolitical risks have truly subsided.
It is noteworthy that the US House of Representatives passed a resolution calling for an end to the war in Iraq, reflecting the profound impact of rising domestic inflation on people's lives. However, this resolution is largely symbolic, and its chances of passing the Senate are extremely low—after all, during this crucial window of negotiation, eliminating the military option would weaken Washington's bargaining power.
US Dollar: Strong data provides support, but Trump's speech triggers a pullback.
Before Trump's speech, the dollar index had been hovering near its highest level in nearly two months, supported by a series of strong economic data. The May ISM Services PMI far exceeded expectations, with the price sub-index hitting a four-year high, reigniting market concerns about inflation; April factory orders and ADP employment data were also impressive.
However, Trump's statement that a "peace agreement was basically reached" completely disrupted the dollar's strong momentum. The market's repricing of the risk of escalation into war reduced demand for the dollar as a safe haven, and the dollar index subsequently fell significantly. Today's focus will shift to the weekly initial jobless claims data and the May Challenger layoffs report; these two data points will be the final piece of the puzzle before tomorrow's non-farm payrolls report.
Despite the resilience of the U.S. economy, market bets on a Federal Reserve rate hike this year are slowly rising. New Chairman Warsh has yet to publicly announce any monetary policy stance, which has somewhat dampened expectations of a more hawkish rate hike.
Gold: Driven by dual positive factors, it rebounded strongly.
Gold was the biggest winner in the market today, rising more than 1.2% intraday. The driving force came from two directions:
First, the US dollar weakened. Trump's peace rhetoric triggered a weaker dollar, making dollar-denominated gold more attractive to holders of other currencies. As Tim Waterer, chief market analyst at KCM Trade, stated, "Trump continues to signal Iran talks; if the Strait of Hormuz reopens, oil prices will fall, and inflation expectations will cool, providing a substantial boost to gold."
Secondly, the inflationary logic has been reactivated. The energy shock brought about by war previously put pressure on gold—high oil prices raised inflation expectations, thereby strengthening bets on interest rate hikes, and high interest rates are naturally detrimental to gold, which does not generate interest. Now, if the prospect of peace comes true, the decline in oil prices will, in turn, reduce inflationary pressures, opening up space for the Federal Reserve to return to a rate-cutting path, and paving the way for a long-term bull market for gold.
It should be noted that since reaching its all-time high of $5,594.82 per ounce on January 29th of this year, gold has cumulatively corrected by over 20%, and its current consolidation around $4,400 still faces strong resistance. Whether technical and fundamental factors can resonate will depend on whether peace negotiations can truly be implemented.
Japanese Yen: A Dilemma at the 160 Level, Central Bank Statements vs. Dollar Trend
The yen finally found some respite after five consecutive days of decline. Bank of Japan Governor Kazuo Ueda signaled a June rate hike, and verbal warnings of government intervention pushed the USD/JPY pair slightly lower from above the 160 level. Currently, the USD/JPY is trading around 159.90, and whether actual intervention will occur remains unclear.
Ueda's hawkish signals are at odds with the Federal Reserve's policy uncertainty. Whether the yen can continue to benefit depends on the trend of the US-Japan interest rate differential and further developments in the geopolitical situation.
US stocks: Nasdaq under pressure, AI sector faces increased downward pressure.
A pullback on Wall Street overnight dragged down Asian stocks, while most European indices continued their rebound. US stock futures showed mixed performance, with Nasdaq futures facing the most significant pressure – chip giant Broadcom plunged about 13% in after-hours trading, despite better-than-expected earnings per share, as both second-quarter revenue and third-quarter guidance disappointed the market.
In terms of momentum, the S&P 500 and Nasdaq Composite had risen for nine consecutive trading days, so profit-taking in the short term was to be expected. The market is currently facing a tug-of-war between two forces: on one hand, the AI rally remains strong (SpaceX is about to launch the largest IPO in history), and on the other hand, a temporary cooling is caused by both geopolitical and valuation pressures.
Summarize
The market is currently in a sensitive window of "peace expectation trading." Trump's speeches have consistently triggered a short-term "triple-pronged" reaction: a falling dollar, rising gold, and lower oil prices. However, the market has learned from these repeated misjudgments, and investors remain highly cautious about a truly lasting agreement. Tomorrow's non-farm payroll data and the progress of negotiations before the weekend will be key variables determining the market's direction in the next phase.
On Wednesday, Iran launched a new round of missile and drone attacks on US bases in Kuwait and Bahrain in retaliation for US strikes on Iranian oil tankers and the Qeshm Island military base. This exchange of fire is considered the largest since the ceasefire in April. Despite this, diplomatic efforts have not ceased, and the ceasefire agreement reached between Israel and Lebanon has provided crucial support to the weary peace process.
Even more impactful news came from the White House. Trump delivered a new speech, declaring on social media that a US-Iran peace agreement was "basically agreed upon," and stating that details would be "released soon." This immediately triggered a new wave of safe-haven buying. The US dollar index subsequently fell sharply, while gold prices surged by over 1.2%, becoming the most obvious winner in the market that day.
However, beneath the optimism, undercurrents remain. The core focus of the Iran-US negotiations remains on key issues such as the reopening of the Strait of Hormuz, the disposal of Iran's highly enriched uranium, the lifting of sanctions, and restrictions on its nuclear and ballistic missile programs. Iran insists that any agreement must include the complete withdrawal of Israeli troops from Lebanon. Trump, on the other hand, prefers to address the two issues separately, and whether a breakthrough can be achieved remains uncertain.
Crude oil: War premium eases
WTI and Brent crude oil futures both fell by more than 2% today, erasing most of yesterday's gains. Previously, oil prices had briefly broken through the $100 mark, causing inflation expectations to surge and making the monetary policy paths of major central banks more unpredictable.
The market is currently caught in a dilemma: on the one hand, there are concerns that a renewed breakdown in the peace process could trigger a surge in oil prices; on the other hand, there is a reluctance to bet on high oil prices again now that negotiations are showing signs of improvement. The market generally considers $100 per barrel a key level—a break above this level would mean renewed inflation, while a sharp drop would suggest that geopolitical risks have truly subsided.
It is noteworthy that the US House of Representatives passed a resolution calling for an end to the war in Iraq, reflecting the profound impact of rising domestic inflation on people's lives. However, this resolution is largely symbolic, and its chances of passing the Senate are extremely low—after all, during this crucial window of negotiation, eliminating the military option would weaken Washington's bargaining power.
US Dollar: Strong data provides support, but Trump's speech triggers a pullback.
Before Trump's speech, the dollar index had been hovering near its highest level in nearly two months, supported by a series of strong economic data. The May ISM Services PMI far exceeded expectations, with the price sub-index hitting a four-year high, reigniting market concerns about inflation; April factory orders and ADP employment data were also impressive.
However, Trump's statement that a "peace agreement was basically reached" completely disrupted the dollar's strong momentum. The market's repricing of the risk of escalation into war reduced demand for the dollar as a safe haven, and the dollar index subsequently fell significantly. Today's focus will shift to the weekly initial jobless claims data and the May Challenger layoffs report; these two data points will be the final piece of the puzzle before tomorrow's non-farm payrolls report.
Despite the resilience of the U.S. economy, market bets on a Federal Reserve rate hike this year are slowly rising. New Chairman Warsh has yet to publicly announce any monetary policy stance, which has somewhat dampened expectations of a more hawkish rate hike.
Gold: Driven by dual positive factors, it rebounded strongly.
Gold was the biggest winner in the market today, rising more than 1.2% intraday. The driving force came from two directions:
First, the US dollar weakened. Trump's peace rhetoric triggered a weaker dollar, making dollar-denominated gold more attractive to holders of other currencies. As Tim Waterer, chief market analyst at KCM Trade, stated, "Trump continues to signal Iran talks; if the Strait of Hormuz reopens, oil prices will fall, and inflation expectations will cool, providing a substantial boost to gold."
Secondly, the inflationary logic has been reactivated. The energy shock brought about by war previously put pressure on gold—high oil prices raised inflation expectations, thereby strengthening bets on interest rate hikes, and high interest rates are naturally detrimental to gold, which does not generate interest. Now, if the prospect of peace comes true, the decline in oil prices will, in turn, reduce inflationary pressures, opening up space for the Federal Reserve to return to a rate-cutting path, and paving the way for a long-term bull market for gold.
It should be noted that since reaching its all-time high of $5,594.82 per ounce on January 29th of this year, gold has cumulatively corrected by over 20%, and its current consolidation around $4,400 still faces strong resistance. Whether technical and fundamental factors can resonate will depend on whether peace negotiations can truly be implemented.
Japanese Yen: A Dilemma at the 160 Level, Central Bank Statements vs. Dollar Trend
The yen finally found some respite after five consecutive days of decline. Bank of Japan Governor Kazuo Ueda signaled a June rate hike, and verbal warnings of government intervention pushed the USD/JPY pair slightly lower from above the 160 level. Currently, the USD/JPY is trading around 159.90, and whether actual intervention will occur remains unclear.
Ueda's hawkish signals are at odds with the Federal Reserve's policy uncertainty. Whether the yen can continue to benefit depends on the trend of the US-Japan interest rate differential and further developments in the geopolitical situation.
US stocks: Nasdaq under pressure, AI sector faces increased downward pressure.
A pullback on Wall Street overnight dragged down Asian stocks, while most European indices continued their rebound. US stock futures showed mixed performance, with Nasdaq futures facing the most significant pressure – chip giant Broadcom plunged about 13% in after-hours trading, despite better-than-expected earnings per share, as both second-quarter revenue and third-quarter guidance disappointed the market.
In terms of momentum, the S&P 500 and Nasdaq Composite had risen for nine consecutive trading days, so profit-taking in the short term was to be expected. The market is currently facing a tug-of-war between two forces: on one hand, the AI rally remains strong (SpaceX is about to launch the largest IPO in history), and on the other hand, a temporary cooling is caused by both geopolitical and valuation pressures.
Summarize
The market is currently in a sensitive window of "peace expectation trading." Trump's speeches have consistently triggered a short-term "triple-pronged" reaction: a falling dollar, rising gold, and lower oil prices. However, the market has learned from these repeated misjudgments, and investors remain highly cautious about a truly lasting agreement. Tomorrow's non-farm payroll data and the progress of negotiations before the weekend will be key variables determining the market's direction in the next phase.
- Risk Warning and Disclaimer
- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
