Federal Reserve officials, including Chair Jerome Powell, have pushed back on expectations for interest rate cuts this year, stating that monetary policy needs to remain restrictive for longer, citing "lack of further progress." The central bank's preferred measure of underlying inflation is expected to have remained elevated in March, leading the Fed to maintain its current high-interest rate policy until it gains greater confidence that price pressures are subsiding. Analysts believe the Fed has adopted a more neutral communication stance, showing a less immediate bias towards cutting rates.


The market closed in the red on Tuesday. However, Dow Jones got a lift from UnitedHealth Group's better earnings results, while big banks that recorded overall better earnings fell on a shrinking profit margin after capitulation in the bond market. The broader S&P 500 and Nasdaq indices were weighed down by declines in sectors like real estate and utilities, although losses were limited by gains in tech.


The gold market held steady after last week's record highs as more traders saw it as being severely overbought. Although geopolitical risks in the Middle East have been taught to drive safe-haven demand, some suggest that locked-up capital in AI and chip manufacturers prevented money from flowing into gold mining operations, further accelerating pricing.


Crude oil prices fell slightly ahead of U.S. inventories data, where last week indicated looser market conditions, despite ongoing supply disruptions from escalating tensions, although Iran indicated an unwillingness to continue with direct assault. Additionally, the rally in oil prices over the past two weeks stalled on a stronger dollar and fears that weakening global economic conditions could dent oil demand in 2024, with mixed data from China adding to these worries.


The global currency market is in unrest, as the U.S. dollar reverses trends, putting emerging market currencies, particularly in Asia, under immense pressure. The dollar defeated the initial narrative that it would be cut soon in lieu of a stronger economy compared to Europe and Asia. Furthermore, China's decision to widen its yuan trading band has given the dollar an additional boost, forcing neighbouring countries to adjust their currencies accordingly and complicating the ability of smaller central banks to lower rates without causing currency instability.