August 4, 2026: S&P 500 Rally, Yen After Intervention, and Oil After the Crash

The US stock market kicked off August with a strong rally. In trading on August 3, the Dow Jones added 1.32% to a record 53,178.41 points, the S&P 500 rose 1.48% to 7,600.50, and the Nasdaq gained 2.13% to 25,913.90. The market was supported by falling oil prices, declining bond yields, and hopes for de-escalation in the US-Iran conflict. Amazon jumped 4.6%, with its market capitalization surpassing $3 trillion for the first time.

S&P 500 futures were up about 0.1% this morning, pointing to continued positive sentiment ahead of the US open.

In the currency market, the US-Japan intervention remains the dominant factor. USD/JPY traded around 157.55-157.63 this morning after falling to 155.20 the day before. The yen is holding onto much of its recent gains, and the risk of further official action is deterring sellers of the Japanese currency. The market increasingly views the 155.00 level as a key support zone.

The dollar remains broadly weak overall. The DXY index stood near 100.00, close to a one-and-a-half to two-month low. EUR/USD traded around 1.1508 after rising to 1.1559, while GBP/USD stood near 1.3425. The Australian dollar climbed to 0.7019, while NZD/USD stood around 0.5867.

Oil is attempting to recover after a sharp drop on August 3. On Monday, Brent crashed roughly 7% after the US backed off a new strike on Iran and reports emerged of possible talks. On the morning of August 4, Brent recovered about 1.3% to $84.89, though Iran denies that any talks are taking place, keeping the geopolitical risk premium elevated.

Today's economic calendar is notably quieter than August 5. The US will release trade balance data, JOLTS job openings, and factory orders. The market expects the trade deficit to narrow to $73.0 billion from $77.6 billion, JOLTS job openings to fall to 7.44 million from 7.59 million, and factory orders to rise 0.2% after a 1.3% drop.

Key Technical Levels

S&P 500

The index closed at 7,600.50. The nearest resistance sits in the 7,620-7,650 zone, followed by around 7,700. Support lies around 7,540-7,560, with the next level near 7,480-7,500. As long as the index holds above 7,540, buyers retain the advantage. However, after a 1.48% rally, the risk of short-term profit-taking is rising.

USD/JPY

The nearest resistance is in the 158.00-158.50 zone, followed by around 159.50-160.00. Support lies near 157.00, then around 155.20-155.00. A break below 155.00 could accelerate the decline, but would also raise the odds of fresh official intervention.

Brent

The nearest resistance is in the $85.00-85.50 zone, followed by around $87.00. Support lies near $83.50-83.80, then around $82.00. As long as Brent stays below $85.50, the current move looks more like a corrective bounce after the crash than the start of a new sustained uptrend.

Base Case Scenario

The main market narrative for August 4 is continued demand for equities following the strong S&P 500 and Nasdaq rally, a weak dollar, and oil's attempt to recover after its sharp drop. For the currency market, the key risk remains USD/JPY: a renewed move toward 155.00 could spark a fresh wave of intervention talk. For EUR/USD and GBP/USD, dollar weakness keeps a moderately positive backdrop for now, but the JOLTS data could shift Fed rate expectations.

By Born2trade market research department

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