Market Dynamics: Key Trends, Movers, and Economic Signals

Image Source : Krish Capital Pty Ltd

Index Update

On Monday, the S&P 500 and Nasdaq fell for a third straight session, down 0.5% and 1.21%, while the Dow edged up 0.08%. Palantir plunged 10.5%, Nvidia dropped 3.1% ahead of earnings, and Microsoft lost 1% on data center concerns. Apple rose 0.6% after announcing a $500 billion US investment and 20,000 new jobs. Investors now await key earnings reports and the PCE inflation index.

Market Movers

On Monday, the top gainers were PepGen Inc. (+89.85%), followed by WeRide Inc. (+15.32%). On the contrary, GDS Holdings Limited (-9.18%) and Pony AI Inc (-7.75%) declined the most the same day.

Commodities Update

Brent crude oil rose to $74.9 per barrel on Tuesday, extending gains as U.S. sanctions on Iran raised supply concerns. The U.S. sanctioned over 30 entities involved in Iranian petroleum trade, aiming to halt Iran’s crude exports. However, gains were limited by demand uncertainty due to tariffs on Canada and Mexico, a possible Ukraine peace deal, and potential Iraqi oil shipments.

Macro Update

The dollar index rose to 106.7 on Tuesday, rebounding from 11-week lows after Trump confirmed tariffs on Canada and Mexico would proceed after a one-month delay. Markets adjusted expectations, dashing hopes of further delays. Investors now await the PCE inflation report and Q4 GDP estimate for monetary policy insights. Last week, PMI data showed a services sector contraction despite strong manufacturing, while consumer sentiment weakened due to inflation concerns.

Futures Update

US stock futures were mostly unchanged on Tuesday after major indexes fell in the previous session due to a tech and AI stock sell-off. Bitcoin traded at $89,720 on Tuesday, down 1.84% (-$1,684) from the previous session. It has fallen 12.78% over the past four weeks but remains up 64.14% over the past year.

After the substantial pullback seen last Thursday and Friday, stocks experienced significant volatility throughout Monday's trading session. The major indices fluctuated wildly, oscillating around the unchanged line as the day progressed. By the end of the day, while the Dow managed a modest gain, the Nasdaq and S&P 500 closed firmly in the red. The S&P 500 dropped 29.88 points, or 0.5 percent, to close at 5,983.26. The Nasdaq fell by 237.08 points, or 1.2 percent, ending at 19,286.92. From a technical standpoint, the S&P 500 is on the brink of breaking its rising channel, suggesting a potential short-term decline. The 14-period RSI is also dropping below the midpoint, further supporting a negative outlook. Key technical levels to watch are 6,075 as a potential resistance level and 5,933 as a support level, which will help assess the market's next direction.