Oil prices fall back to pre‑war levels. Silver drops to a 7‑month low

On Wednesday, the US stock indices closed mixed as caution persisted in the technology sector. By the end of the day, the Dow Jones Index (US30) rose by 0.35%. The S&P 500 Index (US500) declined by 0.10%. The Technology Index NASDAQ (US100) closed lower by 0.43%. Investors attempted to assess whether real demand for AI infrastructure can justify the enormous capital expenditures of major IT giants. Traditional sectors of the economy, by contrast, received notable support. Easing inflation concerns due to the prospect of a rapid resumption of energy exports from the Middle East pushed US Treasury yields lower. As a result, the Dow Jones outperformed. The Index was also supported by expectations of a major reshuffling: on Monday, June 29, Alphabet (Google’s parent company) will officially replace Verizon in the Dow Jones Industrial Average, significantly increasing the weight of the technology and AI sectors in this historic benchmark.

The Canadian dollar (USD/CAD) posted a sharp decline, falling to a yearly low of 1.42 per US dollar. The main driver of the “loonie’s” weakness was the powerful global rally of the US dollar. Traders are aggressively pricing in a hawkish scenario in the United States after several FOMC members under Kevin Warsh signaled the need for more than one rate hike before the end of 2026. Unlike the Fed’s firm stance, the Bank of Canada (BoC) is taking a far more cautious and patient approach, depriving the national currency of monetary support.

At the end of June, the Mexican peso fell to 17.6 per US dollar, hitting its lowest level since early April. The main driver of the peso’s weakness was the sharp global strengthening of the US dollar against both developed and emerging‑market currencies. Meanwhile, domestic Mexican factors removed fundamental support for the peso. Fresh economic data showed that headline inflation in Mexico unexpectedly slowed to a ten‑month low of 3.55% in the first half of June, while core inflation also fell more than expected. This cooling of price growth, combined with a weakening national economy (GDP contracted by 0.6% in Q1), strengthened the case for further monetary easing by the Bank of Mexico, which has already cut its policy rate to 6.50%.

European indices traded without a unified direction yesterday. By the end of the day, Germany’s DAX (DE40) fell by 0.62%, France’s CAC 40 (FR40) rose by 0.54%, Spain’s IBEX 35 (ES35) declined by 0.45%, and the UK’s FTSE 100 (UK100) closed higher by 0.31%.

On Wednesday, silver prices (XAG/USD) plunged by roughly 5%, falling to $59 per ounce and hitting their lowest level since December of last year amid a broad strengthening of the US dollar. With inflation concerns easing and oil prices falling below $70, silver lost its key growth drivers. However, strong industrial demand from green energy and AI‑related infrastructure may prevent the metal from falling below the critical support zone of $55-56.

The US crude oil (WTI) prices fell below the psychological $70 per barrel mark during trading (with lows at $69.63), hitting their lowest levels since late February – the beginning of the conflict’s hot phase. The sharp decline (40% from wartime peaks) is driven by the rapid disappearance of the geopolitical risk premium. After the interim agreement between the US and Iran, shipowners began confidently restoring traffic through the Strait of Hormuz with transponders on, having received official safety guarantees from the UN’s International Maritime Organization (IMO). According to the IEA, exports from the UAE have already recovered to 85% of pre‑crisis levels, while total oil shipments from the Persian Gulf recently reached around 60 million barrels.

On Wednesday, Japan’s Nikkei 225 (JP225) fell by 0.88%, China’s FTSE China A50 closed higher by 0.39%, Hong Kong’s Hang Seng (HK50) rose by 0.33%, and Australia’s ASX 200 (AU200) closed higher by 0.24%. The Hang Seng Index fell to 23,106, retracing the previous session’s gains and hitting its lowest level since June 2025. Investors chose to lock in profits and act cautiously ahead of Hong Kong’s fresh trade balance data, pushing the benchmark to two‑year lows. However, the decline was partially offset by a strong rally in the Asian tech sector.

On Thursday, the Australian dollar (AUD) broke key support and fell below 0.690 USD, settling near a three‑month low amid a powerful global rally of the US dollar. This aggressive decline in the “aussie” occurred despite strong domestic labor‑market data: in May, Australia created 40,300 new jobs after April’s drop of 40,600, while the unemployment rate predictably fell to 4.4%. Nevertheless, the positive employment report only intensified investor concerns about the Reserve Bank of Australia’s next steps, as a strong labor market combined with high core inflation gives the regulator room to continue its tightening cycle.