S&P 500 Hits Record, USD/JPY Holds Near 158 Amid Hormuz Risk
As of 2026-10-07 00:00 SGT
Key points
- US stocks are extending gains at midday in New York, with the S&P 500 at a fresh record high as oil prices and Treasury yields slide
- The US trade deficit widened to $105.6 billion in August, the widest since just before last year's tariffs took effect
- European bourses closed higher across the board, and the euro rebounded against the dollar as France moved to narrow its budget gap, tightening the OAT-Bund spread
- The Nikkei 225 closed at 70,684, back above 70,000 for the first time in roughly three months, while the Hang Seng also extended its advance
- Fresh reports of tanker attacks near the Strait of Hormuz revived geopolitical risk premia in the oil market
Market snapshot
| Instrument | Level | Change |
|---|---|---|
| USD/JPY | 158.11 | +0.14% |
| EUR/USD | 1.1265 | +0.37% |
| Nikkei 225 (close) | 70,684 | +1.05% |
| Hang Seng (close) | 24,281 | +1.29% |
| Dow futures | 51,904 | +0.67% |
| S&P 500 futures | 7,893.25 | +0.86% |
| Nasdaq 100 futures | 31,585 | +0.85% |
| Gold futures | 4,196.70 | +0.96% |
| WTI crude | 88.73 | -0.78% |
| Bitcoin | 85,748 | -0.00% |
| US 10-yr yield | 5.260% | -5.1bp |
Foreign exchange — Steady
USD/JPY is little changed at 158.11 (+0.14%), holding inside the prior session's 157.76-158.25 range. Bank of Japan board member Sato backed a gradual pace of further rate hikes but flagged that private consumption momentum remains soft, while Governor Ueda said the BOJ would keep an "accommodative environment" after September's hike without explicitly flagging an October move. Traders are watching whether the pair can clear its 200-day moving average. EUR/USD firmed to 1.1265 (+0.37%) as France's steps to narrow its deficit helped compress the OAT-Bund spread. Ahead of the Tokyo open, USD/JPY looks set to stay confined to the upper-157s to lower-158s.
Equities — Firm
European markets closed higher, with Germany's DAX up 0.84%, France's CAC up 0.45%, Italy's FTSE MIB up 0.71% and the UK's FTSE 100 up 0.39%. In New York, the Dow was up more than 300 points at midday and the S&P 500 printed a fresh record, with Nvidia among the leaders as its market cap approaches $6 trillion. The Nikkei 225 closed up 1.05% at 70,684, back above the 70,000 level for the first time in about three months, while the Hang Seng added 1.29% to 24,281. Through the rest of the NY session, the key test is whether the record run can hold.
Macro — Mixed
August's US trade deficit widened to $105.6 billion, the broadest since just before last year's tariffs, a gap that could weigh on third-quarter GDP. San Francisco Fed President Daly flagged that AI, tariff and energy-cost pressures could keep inflation elevated for longer, while Fed Governor Bowman said the central bank will soon look at updating banks' asset-size thresholds. In France, student protests have spread nationwide even as Le Pen pledged to bring the deficit below 3%, and UBS's CEO warned "hard measures" are needed to address the French debt crisis. Into the Asia morning, these US-Europe macro threads are likely to stay intertwined.
Commodities — Soft
WTI slipped to $88.73 (-0.78%), breaking below the prior session's $88.74 low as sellers keep control; the next support is seen near $86.83. The EIA, meanwhile, raised its 2026 Brent forecast to $96 a barrel from $91 previously. Gold held at $4,196.70 (+0.96%), still testing support near $4,230, while an LBMA survey put the one-year gold price outlook at $5,013 an ounce. Heading into the Tokyo session, crude's softness and gold's resilience look set to stay in contrast.
Geopolitics — Tense
India's foreign ministry said a Panama-flagged merchant vessel was attacked near Oman while transiting the Strait of Hormuz, injuring 12 crew, 11 of them Indian nationals. The UK Maritime Trade Operations is separately verifying a delayed report that another tanker leaving the strait was struck by an unidentified aerial object on October 5. Iran said it is awaiting a US response on a Hormuz-related proposal, keeping the strait in focus for oil markets. The EU is set to approve a fresh Russia sanctions package on October 7, adding roughly 1,650 new entities and individuals tied largely to the military-industrial complex. Through the rest of the NY session, Hormuz headlines remain the key swing factor for oil's risk premium.
Upcoming events
| Time (SGT) | Region | Event | Why it matters |
|---|---|---|---|
| 10/08 02:00 | US | FOMC Meeting Minutes | Gauge the tone of September's hike discussion |
| 10/08 16:30 | US | FOMC Member Waller Speaks | Watch for signals on the pace of further hikes |
| 10/08 20:15 | UK | BOE Gov Bailey Speaks | View on UK policy and fiscal risk |
| 10/08 20:30 | US | Unemployment Claims (forecast 200K) | Check labor market resilience |
| 10/09 20:30 | CA | Employment Change (forecast 6.2K) | Gauge Canadian jobs strength |
| 10/09 20:30 | CA | Unemployment Rate (forecast 6.5%) | Read alongside the jobs change |
| 10/09 22:00 | US | UoM Consumer Sentiment (forecast 47.6) | Check for a bottom in consumer mood |
| 10/09 22:00 | US | UoM Inflation Expectations | Track shifts in inflation expectations |