US PPI, Retail Sales, Jobless Claims, Fed Chair Powell Speaks

The EUR/USD pair hovered near the 1.1200 level on Wednesday, showing limited momentum as markets. Despite an early bid higher, the pair remained trapped in a narrow range, reflecting a cautiously bullish tone amid mixed technical signals and a subdued macroeconomic backdrop.

European data offered little to stir sentiment, with Germany’s final Harmonized Index of Consumer Prices (HICP) for April meeting expectations. Meanwhile, traders looked to the U.S. for more decisive inflation cues. Tuesday’s Consumer Price Index (CPI) provided some relief, and attention now turns to Thursday’s Producer Price Index (PPI), where Core PPI is forecast to ease from 3.3% to 3.1% year-over-year. Although slowing inflation is seen as a positive sign, concerns over potential tariff-related impacts are growing, possibly affecting upcoming headline data.

With traders awaiting clearer signals from upcoming inflation data and broader economic developments, EUR/USD remains in a holding pattern — poised but cautious as it tests the strength of its recent gains.

Gold prices fell sharply on Wednesday, marking their second decline in three sessions, as improving global risk sentiment and a weakening technical outlook pushed the yellow metal below the $3,200 threshold.

The sell-off was largely driven by renewed optimism surrounding global trade relations, particularly a truce between the United States and China. This has buoyed investor sentiment and steered capital away from safe-haven assets like gold. Further contributing to the upbeat mood, U.S. President Donald Trump's diplomatic tour of the Middle East has generated headlines about potential trade agreements with regional partners, as well as pending deals with Japan and South Korea.

Rising U.S. Treasury yields also undermined gold’s appeal. Yields climbed sharply on Wednesday, even as the latest inflation data showed no significant change in annual price growth for April compared to March. While such a flat inflation profile typically increases the likelihood of more accommodative monetary policy, the Federal Reserve continues to maintain a cautious, data-dependent stance.

With geopolitical developments supporting risk appetite and economic data keeping the Fed on hold, gold may face continued headwinds unless safe-haven demand re-emerges.

Oil prices slipped on Wednesday following an unexpected rise in U.S. crude stockpiles, renewing investor worries about a potential supply glut. The decline comes after both benchmarks hovered near two-week highs in the previous session, buoyed by a temporary easing in U.S.-China tariffs that had improved market sentiment.

The downturn was sparked by weekly data from the U.S. Energy Information Administration (EIA), which revealed a surprise build of 3.5 million barrels in crude inventories, pushing total stockpiles to 441.8 million barrels. This came in contrast to analysts’ expectations of a 1.1 million-barrel draw.

Adding to the pressure, a strengthening U.S. dollar weighed on oil prices by making dollar-denominated crude more expensive for holders of other currencies—an effect that can erode demand.

Meanwhile, OPEC and its allies (OPEC+) continue to increase supply, even as the cartel slightly downgraded its forecast for output growth from non-OPEC producers, including the United States. While demand expectations remain steady, concerns are mounting that continued supply growth may eventually outpace consumption.

With rising inventories, a firmer dollar, and expanding supply, oil markets face a fragile balance as traders await further clarity on global demand trends and geopolitical developments.

The US Tech 100 extended its recent upward momentum on Wednesday, closing slightly higher and led once again by technology stocks. This follows Tuesday’s milestone when the index turned positive for the year, buoyed by growing optimism over U.S.-China trade developments.

Investor focus remained fixed on global trade developments, as U.S. President Donald Trump’s ongoing tour of the Middle East yielded a $600 billion investment commitment from Saudi Arabia. Markets are also awaiting the possible announcement of a major trade deal once the president returns, according to National Economic Council Director Kevin Hassett.

Adding to the positive sentiment, reports emerged that the Trump administration plans to significantly cut tariffs on low-value imported goods from China.

Technology shares continued to outperform, led by chipmakers and AI-driven firms. Nvidia and Advanced Micro Devices climbed on the back of strong chip demand and new deals with Saudi-based tech firm Humain. Alphabet Inc. also posted gains, contributing to the sector's strength.

Super Micro Computer Inc.  extended its rally after Raymond James initiated coverage with an "outperform" rating, citing long-term AI server growth. The company also announced a $20 billion, multi-year partnership with Saudi data center operator DataVolt.

With no major U.S. economic data released on Wednesday, markets turned to commentary from Federal Reserve officials for direction.