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Index Update

US stocks suffered a sharp decline on Friday, with the S&P 500 and Nasdaq 100 both dropping 1.5%, and the Dow Jones plunging nearly 700 points. The sell-off was triggered by a stronger-than-expected jobs report, which showed a robust labor market with 256,000 new jobs and a decline in the unemployment rate to 4.1%. This raised concerns that the Federal Reserve could keep interest rates elevated for a longer period, dampening hopes for rate cuts.

Market Movers

Stocks witnessed a mixed closing! Financials, real estate, and tech stocks led declines, with Nvidia falling 3%. But Delta Air Lines soared 9% and Walgreens surged 27.5% on strong earnings. S&P 500 lost 1.9%, Nasdaq dropped 2.2%, and Dow declined 1.8% for the week.

Macro Update

The dollar index has surged to 110, its highest level since October 2022, as traders scale back expectations for Federal Reserve rate cuts in 2025 following a stronger-than-expected jobs report. Concerns over inflationary policies under President-elect Donald Trump have also added to the cautious outlook, with traders now anticipating only 27 basis points of rate cuts in 2025, down from 50 basis points forecast earlier this month.

Commodities Update

Brent crude oil futures have surged over 2% to $81.5 per barrel, the highest level in more than four months. The significant price hike is attributed to new US sanctions on Russia's energy sector, which have sparked concerns about potential supply disruptions. The sanctions, targeting major exporters, insurers, and over 150 tankers, have left key buyers like India and China scrambling for alternatives. Meanwhile, gold prices have reached $2,685 per ounce as investors seek safe havens amid uncertainty surrounding the incoming US administration's policies. The precious metal is widely regarded as a hedge against inflation, and the prospect of tighter sanctions on Iran has added to its appeal. As investors closely watch the release of US CPI inflation data, the market remains volatile, with silver prices slipping to around $30.2 per ounce.

Futures Update

US stock futures tumbled on Monday as investors braced for a critical week ahead, marked by key economic data releases and major earnings reports from big banks like Citigroup, Goldman Sachs, and JPMorgan Chase. The week's economic highlights include Tuesday's producer inflation figures and Wednesday's consumer inflation data, alongside remarks from Federal Reserve officials.

U.S. stock markets witnessed a significant decline on Friday due to a combination of factors. The strong non-farm payroll data led to increased concerns that the Federal Reserve may either maintain current interest rates or slow down the reduction pace. Additionally, rising bond yields further added to the market's woes. The S&P 500 also suffered a 1.54% loss, closing at 5,827.03 after dropping 91.23 points. Meanwhile, the Nasdaq Composite Index ended at 19,161.62, down 317.25 points and marking a 1.63% decline. From a technical standpoint, the S&P 500 appears to be nearing a potential downside breakout from its rising channel pattern, which could lead to short-term market fluctuations. Furthermore, the 14-period Relative Strength Index (RSI) is below its midpoint, reinforcing the bearish sentiment. Key levels to monitor in the coming days include the resistance level of 5,920 and the support level at 5,770.

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