S&P 500 Hits Record Highs, Oil Pressured by Supply Risks, China Unveils Debt Relief Plan

Image Souce: Krish Capital Pty Ltd

Index Update

The S&P 500 hits fresh record highs, closing up 0.8% at 5,973.10, as the post-election rally continues following the Fed’s rate cut. The NASDAQ also posts a new record, gaining 1.5%, while the Dow finishes flat.

Commodities Update

Brent crude oil futures dip to ~$75/bbl, but still on track for a weekly gain as supply risks ease. Hurricane Rafael’s impact on U.S. production lessens, while China’s 9% drop in crude imports and rising U.S. inventories add pressure. Meanwhile, Trump’s policies could push prices lower or tighten supply with sanctions on Iran & Venezuela.  Gold slides to ~$2,700 but remains supported by strong demand & ETF inflows. Markets eye Trump’s economic plan and Fed’s cautious rate stance, signaling potential inflation and higher rates ahead.

Macro Update

China raises local government debt ceiling to CNY 35.52 trillion & unveils CNY 10 trillion program to swap off-balance sheet debt for cheaper financing. This move aims to save CNY 600B in interest over 5 years, though no new fiscal stimulus for consumption was announced. The Fed cuts its main interest rate by 25bps to 4.5%-4.75%, following September's 50bps reduction. In the press conference, Chair Powell reassured that the election "will have no effect" on Fed policy and confirmed he wouldn't resign if Trump asked.

Futures Update

US stock futures edge higher as Wall Street digests the Fed's latest rate cut, fueling the post-election rally. Dow futures +43pts, S&P 500 +6pts, Nasdaq +15pts. All three indices hit record highs yesterday and are on track for strong weekly gains—S&P 500 +4%, Nasdaq +5.6%. Investors remain upbeat as inflation moves toward the 2% target and more rate cuts are expected. 

Major indexes surged to record highs, while Treasury yields also increased significantly following Donald Trump's decisive victory, prompting investors to consider the potential effects of Republican policies. Stocks rallied on the belief that the new administration could accelerate business and economic growth. The tech-heavy Nasdaq led the way, jumping by 285.99 points, or 1.5 percent, to finish at 19,269.46. Meanwhile, the S&P 500 rose by 44.06 points, or 0.74 percent, reaching 5,973.09. From a technical perspective, the S&P 500 is moving within an upward channel, indicating a bullish sentiment as it continues to climb. The rising 14-period Relative Strength Index (RSI) suggests a positive outlook, having returned to neutral territory. Key levels to monitor include resistance at 6,065 and support at 5,870.