The S&P 500 saw a pullback after new data was released, with the tech sector experiencing more volatility than the overall market. Some clients took advantage of this dip, resulting in one of the best trading days of 2026 so far. Although the QQQ index surpassed $626, the cautious trading before the market closed looked similar to midweek patterns.

Precious Metals Hold Their Ground

Precious metals gained strength on Thursday as they remained steady at key support levels. The US Dollar rose due to increased short-term yields amid speculation about potential rate cuts based on jobs data. In foreign exchange, the EUR/USD fell to multi-week lows between 1.1625 and 1.1620, impacted by a strengthening US Dollar. The GBP/USD also faced challenges, dropping below 1.3400 and nearing its 200-day simple moving average due to the Dollar’s strength. Gold remained strong, testing yearly highs close to $4,500 per ounce. This rise was supported by risk-averse sentiment, even with a robust Dollar. Looking ahead, US CPI data could influence the Dollar’s impact on the market. Meanwhile, XRP is still under pressure, with weak retail demand causing its futures Open Interest to decrease to $4.15 billion. There are reports of possible early elections in Japan, which might affect the USD/JPY exchange rate. The S&P 500’s strong rebound after the volatile jobs data shows that buying dips can be rewarding. On Friday, the index successfully reclaimed the 6,000 level, marking the best trading day of the year so far. This surge was fueled by a December jobs report that revealed a healthy addition of 210,000 jobs, along with a welcome slowdown in wage growth, which supports a more accommodating Federal Reserve.

Market Strategies After Data Release

For those trading derivatives, selling out-of-the-money puts on major indices like the SPX or NDX could be an effective strategy to earn premium, as the market seems eager to support any pullbacks. The CBOE Volatility Index (VIX) highlighted this situation, spiking to 18 during the data release but falling back below 15 by the close, suggesting that fear quickly diminished. We can expect ongoing volatility, making options strategies appealing. The market is now factoring in Fed rate cuts, with futures indicating over a 70% chance of a first cut by the May 2026 meeting. This expectation is driving the current rally, allowing the market to overlook some of the narrower hiring trends mentioned by Fed officials. Traders should get ready for this positive trend to continue, especially if upcoming data shows a slowdown in inflation. Looking ahead, Tuesday’s US CPI report is the next big event that will either support or challenge this optimistic outlook. With core CPI ending 2025 at an annual rate of 3.5%, further signs of disinflation could boost the equity rally and pose challenges for the recently strong US dollar. We should watch for significant market movement when this data is released. Despite the rally, gold is nearing its yearly highs around $4,500, indicating that traders are still hedging against risks. This strength, even amid a rising dollar and bond yields, is likely linked to geopolitical tensions related to potential US-EU trade conflicts and NATO discussions. Buying call options on gold or related ETFs can be a smart hedge against any unexpected negative developments in the coming weeks. Create your live VT Markets account and start trading now.

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