MARKETS TURN RISK-OFF AS EARNINGS DISAPPOINT AND GEOPOLITICAL RISKS ESCALATE
Technology stocks led the selloff after Tesla’s earnings disappointed on profitability and cash flow, while escalating tensions in the Red Sea pushed oil prices sharply higher. Trump also warned that the United States would hold Iran directly responsible for future attacks carried out by Yemen’s Houthi rebels after two Saudi Arabian vessels were reportedly targeted overnight.
The combination of weaker earnings, higher oil prices, and growing geopolitical uncertainty has pressured global equities and cryptocurrencies, while driving investors toward defensive assets and pushing market volatility sharply higher.
For now, markets are entering a period where macro headlines and earnings remain the dominant catalysts, with traders closely watching whether the current risk-off sentiment deepens or stabilizes.
GLOBAL EQUITIES TURN RISK-OFF
Global equity markets are trading lower as investors adopt a more defensive stance, with selling pressure spreading across major indices.
The Nasdaq is leading losses, falling 1.87%, followed by the S&P 500 (-0.98%), Dow Jones (-0.96%), S&P/TSX (-0.70%), and Russell 2000 (-0.60%).
At the same time, traditional safe-haven indicators are strengthening. The VIX has surged 14.8%, signaling a sharp increase in expected market volatility, while the U.S. Dollar Index is up 0.33%, reflecting increased demand for defensive assets.
The combination of falling equities, a stronger U.S. dollar, and rising volatility points to a clear shift toward a more cautious market environment.
S&P 500 TESTS A CRITICAL SUPPORT LEVEL
The recent selloff has pushed the S&P 500 ETF (SPY) back toward an important technical support zone. On the daily chart, it is trading around 739.21, retreating after failing to break above the 61.8% Fibonacci retracement ($750.03). Price is now testing the key $737.62 support level.
A break below this support could expose the next downside target near $727.59, followed by the major support around $717.53. On the upside, buyers must first reclaim $750.03 before another attempt toward the recent high near $757.70.
With volatility increasing and technology stocks under pressure, SPY is approaching a technical level that could determine the market’s next major move.
OIL SURGES AS TRUMP WARNS IRAN
Oil prices extended their rally after Trump warned that the United States would hold Iran directly responsible for any future attacks carried out by Yemen’s Houthi rebels. The comments followed reports that the Houthis attacked two Saudi Arabian vessels in the Red Sea, raising fresh concerns over shipping security across one of the world’s most important energy corridors.
Markets immediately priced in a larger geopolitical risk premium, sending crude oil sharply higher. On the 4-hour chart, WTI Crude is trading around $91.45, extending its uptrend after reclaiming all three major moving averages.
Price has broken above the important $89.64 resistance, which now becomes the first support. The next major resistance sits near $96.84. As long as crude remains above $89.64, buyers remain firmly in control.
GOLD PULLS BACK AS THE DOLLAR STRENGTHENS
Despite heightened geopolitical tensions, gold has come under pressure as investors rotate into the U.S. dollar and reassess interest rate expectations. On the 4-hour chart, Gold (XAU/USD) is trading around $4,058.92, slipping back below its 100 MA ($4,068.35) after failing to hold its recent breakout.
The first resistance remains at $4,161.76, while the 50 MA ($4,046.77) serves as the first key support. A break below this level could expose $3,966.94.
Although geopolitical risks normally support gold, today’s price action suggests the stronger U.S. dollar is currently exerting greater influence on the precious metal.
TESLA PLUNGES AFTER EARNINGS
Tesla is experiencing its biggest decline in more than a year after investors reacted negatively to its second-quarter earnings. While the company reported record deliveries of 480,126 vehicles and $28.24 billion in revenue, investors focused on deteriorating profitability.
Automotive gross margins fell to 16.3%, adjusted EPS came in at $0.33, below expectations, and free cash flow turned negative after capital expenditures surged to $5.8 billion.
Elon Musk also reiterated that 2026 will be a massive investment year for AI infrastructure, Robotaxi, Optimus, and Full Self-Driving, increasing investor concerns about near-term returns.
On the daily chart, TSLA is trading around $324.52, breaking decisively below the major $375 support zone. The stock now sits well below both its 25 MA ($394.77) and 50 MA ($395.01), confirming strong bearish momentum.
The next key support sits near $337.29, while the $375 region now becomes the first major resistance.
CRYPTO SENTIMENT RETURNS TO FEAR
Investor confidence has weakened again as the Crypto Fear & Greed Index falls back into Fear, dropping to 37 after standing at 40 (Neutral) yesterday.
Although sentiment has deteriorated, it remains well above last month’s reading of 20, indicating that traders are becoming more cautious rather than outright bearish.
The decline reflects growing uncertainty as geopolitical risks, higher oil prices, and weakness across global equities weigh on digital assets.
BITCOIN HOLDS ABOVE A CRITICAL SUPPORT ZONE
On the daily chart, BTC is trading around $65,120, remaining above both its 25 MA ($63,378) and 50 MA ($63,084) after reclaiming these levels earlier this month.
The immediate resistance sits near $66,131, followed by $71,997. On the downside, the 25 MA and 50 MA now form an important support zone. Losing these levels could expose $64,897 and $64,226. For now, Bitcoin’s pullback appears to be a healthy consolidation rather than a broader trend reversal.
ALTCOIN WATCH
HYPE is consolidating after its recent rally. On the 4-hour chart, the token is trading around $59.60, sitting just below its 25 MA ($60.56) and 50 MA ($61.40).
Reclaiming these moving averages would improve the short-term outlook, while the $55 region remains the key support.
LIT remains range-bound beneath a key resistance zone. Price is trading around $2.25, just below its 25 MA ($2.26), 50 MA ($2.29), and 100 MA ($2.39).
A breakout above the 100 MA would be the first confirmation that bullish momentum is returning.
WHAT TO WATCH
- Developments in the Middle East following Trump’s warning toward Iran.
- Oil prices and their impact on inflation expectations.
- Whether the S&P 500 can hold key technical support.
- Bitcoin’s ability to defend the$65K support zone.
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