Inflation, Yields, and AI Spending Drive the Market While Key Price Levels Hold

The market is trading around one central question right now: is inflation becoming enough of a problem to force the Federal Reserve back toward raising rates? Treasury yields pushed higher as oil strengthened, and the probability of a September rate hike moved back above 50%. Just after the latest jobs report, those odds had fallen below 50%. The next major test is CPI at 8:30 AM ET. A hotter reading could push those September hike expectations sharply higher, while a neutral or softer number could move them back below 50%.

The S&P 500 Index (SPX) is still showing surprising resilience. Oil surged substantially, yet the S&P 500 only fell 4 points, less than 0.1%, and is slightly higher now. The index remains near resistance, but instead of breaking down, it continues moving sideways. That keeps the bull flag structure intact. If that consolidation eventually breaks higher, the larger resistance area sits around 8,100 to 8,200, roughly 6% higher. Rising M2 money supply also remains supportive because more liquidity in the financial system means more capital potentially available to move into stocks.

The U.S. dollar is still holding technical support, while the 10 year Treasury yield has eased slightly to 4.686% but remains near 52-week highs. That matters because oil previously reached about $120 per barrel and is now closer to $80, yet yields remain elevated. The bond market is still signaling concern that inflation may remain persistent even if energy prices cool.

Staying with commodities, oil traded as high as about $84.75 overnight before pulling back. It is now tightening into a wedge pattern, and the cleaner opportunities that existed at the earlier oversold level and later resistance have passed. At this point, the better move is patience until the range produces a stronger setup.

Gold is pressing into major resistance around $4,400 after a strong rally. If it pulls back, $4,170 becomes the first important support level. A break below $4,170 could open the door toward roughly $3,900. The VanEck Gold Miners ETF (GDX) is also extended after a wedge breakout, with an important gap fill resistance level at $93.85. A sharp move directly into that level could create a short-term swing setup.

Silver has already broken through $64 resistance, but now it needs to prove it can stay above $64. Gold, silver, the dollar, and Treasury yields could all see significant movement around CPI because that inflation number feeds directly into expectations for future rate hikes or cuts.

Natural gas is roughly flat to slightly positive after a good two-day bounce, but it has reached short-term resistance. A breakout could open a move toward roughly $2.94 to $2.95. There is also the possibility of a small inverse head and shoulders pattern forming, but the right shoulder has not developed yet, so that setup is not confirmed.

Now to artificial intelligence, because NVIDIA Corporation (NVDA) remains one of the biggest stories. NVIDIA announced a $500 billion deal involving Apollo Global Management, Inc. (APO), BlackRock, Inc. (BLK), Blackstone Inc. (BX), Brookfield Corporation (BN), The Goldman Sachs Group, Inc. (GS), and KKR & Co. Inc. (KKR). The idea is to make the AI infrastructure buildout and the chips behind it more broadly investable.

The opportunity is enormous, but so are the risks. The concern is circular financing, where capital moves into AI infrastructure, eventually creates more demand for NVIDIA chips, and flows back through the same financial system. That raises questions about overbuilding, how long rapidly changing GPUs remain useful, concentration around one chip maker, and debt or off-balance sheet leverage. NVIDIA sold off sharply previously but is bouncing on the deal because, regardless of the structure, more AI infrastructure spending can ultimately mean more NVIDIA chip revenue.

Riot Platforms, Inc. (RIOT) is also moving sharply higher after signing a 20 year agreement with Anthropic worth about $9 billion. Riot closed around $19 and was trading roughly $4 higher in the premarket. The first meaningful technical level is around $25, where the prior pivot high could create a possible short-term trading setup.

Sea Limited (SE) is moving higher after earnings. Earnings were slightly below analyst expectations, but revenue and guidance were very strong. The first potential short area is around $139, where a gap fill and another technical level come together.

Onsemi (ON) is moving in the opposite direction, falling from around $39 to near $31. Support sits around $31.50. If that breaks, the next levels are the $30.65 gap fill and then $30. After a decline this severe, the better approach is allowing roughly a three-day window for institutional selling and possible margin call pressure to settle before looking for a swing opportunity.

Bitcoin (BTC) also sold off, but the decline was only about 2%. Roughly $100 million worth of Bitcoin was sold as funds were directed toward Strategy Inc. (MSTR) and its SRTC stock. Even with that selling, Bitcoin remains above its longer-term breakout trend line. As long as that line continues holding as support, the bullish structure remains intact.

Across all of this, the market is sitting near several important decision points at the same time. The S&P 500 is holding near resistance, yields remain elevated, gold is testing $4,400, silver is trying to confirm above $64, AI capital spending continues to accelerate, and Bitcoin is defending its breakout. This is a market where patience matters because being near a level is not enough. Let price confirm the move before committing capital.