The Nasdaq Composite surged to a new all-time high on Friday, lifted by gains in megacap tech stocks, even as broader market indices faced headwinds. While the S&P 500 dipped slightly and the Dow posted a significant loss, investor enthusiasm for upcoming tech earnings provided a lift to the tech-heavy index. Meanwhile, concerns over rising bond yields and lacklustre corporate earnings weighed on sentiment elsewhere. Treasury yields edged higher, keeping pressure on equities as markets navigated a mixed economic landscape marked by fluctuating earnings, rising geopolitical risks, and signs of cooling global growth.

Key Takeaways:

  • Nasdaq Reaches Record High: The Nasdaq Composite climbed 0.56% on Friday, closing at an all-time high of 18,518.61. Driven by gains in major tech stocks, the index defied broader market struggles as investors anticipated strong earnings reports from companies like Nvidia, Meta Platforms, Amazon, and Microsoft.
  • S&P 500 and Dow Face Losses: The S&P 500 edged down by 0.03% to end at 5,808.12, while the Dow Jones Industrial Average dropped 259.96 points, or 0.61%, to close at 42,114.40. This marked a challenging week for both indices, with the Dow ending its six-week winning streak down by 2.7% and the S&P 500 finishing nearly 1% lower.
  • European Markets Close Lower Amid Earnings Disappointments: European stocks faced pressure as third-quarter earnings revealed mixed results. The pan-European Stoxx 600 slipped 0.04% on Friday, capping a 1% loss for the week. Travel stocks led declines with a 1.5% drop, and the FTSE 100 finished down 1.31% at 8,248.84. France’s CAC 40 dipped 0.1% to 7,498, marking a 1.5% weekly loss, while the German DAX managed a modest 0.11% gain, lifted by improved business confidence. Mercedes and Remy Cointreau were notable losers, with Mercedes falling 1% after reporting a 64% drop in operating profit in its core cars division, citing weak demand and intense competition in Asia. Remy Cointreau dipped 0.7% as it lowered its sales outlook amid softer demand in the US and Asia-Pacific.
  • Asia-Pacific Markets Mixed as Japan’s Inflation Slows Ahead of Elections: Markets in the Asia-Pacific region saw mixed results on Friday. Japan’s Nikkei 225 dropped 0.60% to close at 37,913.92, marking its fifth consecutive day of losses, as investors processed new inflation data. Tokyo’s headline inflation rate cooled to 1.8% in October, down from 2.2%, adding to speculation about potential Bank of Japan policy adjustments after the upcoming election. In Singapore, manufacturing output surged 9.8% year-over-year in September, beating expectations and indicating resilience despite slowing global demand. China’s CSI 300 index rose 0.70% to close at 3,956.42, while Hong Kong’s Hang Seng index edged up 0.52%. South Korea’s Kospi posted a marginal gain, closing at 2,583.27, while the smaller Kosdaq index dropped 0.98% to end at 727.41.
  • Oil Prices Surge Amid Middle East Tensions and US Election Uncertainty: Oil prices posted strong gains, driven by heightened geopolitical risk in the Middle East and uncertainty surrounding the upcoming US election. Brent crude rose 2.25% on Friday to settle at $76.05 per barrel, while US West Texas Intermediate (WTI) climbed 2.27% to close at $71.78. For the week, Brent recorded a 4.09% gain, while WTI rose 3.7%, as markets weighed the impact of recent military actions in the Middle East. Israel’s airstrikes on military sites in Iran added to fears of a potential escalation in regional tensions, while the looming US election and anticipated central bank policy decisions have driven demand for oil as a hedge against market volatility.

FX Today:

  • EUR/USD Struggles to Hold Above 1.0800 Amid Bearish Sentiment: The EUR/USD pair closed lower on Friday, settling near 1.0794 after a failed attempt to recover above the 1.0820 level. The 50-period Simple Moving Average (SMA) continued to act as resistance, highlighting the pair’s ongoing bearish momentum. Further resistance lies at 1.0820, with additional support at 1.0780. A break below this level could open the door for a retest of the 1.0750 zone, while a sustained push above 1.0820 would be necessary to shift sentiment towards a potential recovery.
  • GBP/USD Under Pressure Below 1.3000: GBP/USD struggled to regain ground on Friday, closing near 1.2960 as selling pressure kept it below the psychological 1.3000 level. The pair faced resistance around the 50-period SMA at 1.2996, which capped attempts to rebound. Immediate support is seen at 1.2920, and a break below this level could extend losses toward 1.2850. To reverse its current downtrend, the pair would need to break above the 50-period SMA, with the next target at the 100-period SMA near 1.3040.
  • USD/CHF Remains Range-Bound Near 0.8660: The USD/CHF pair closed flat around 0.8660, trading within a tight range as it struggled to establish a clear directional bias. Support is positioned near the 50-period SMA at 0.8648, with resistance around 0.8700. A break above 0.8700 could indicate a more significant upside move, while a drop below the 50-period SMA may lead to a retest of the 0.8600 level. Until a decisive breakout occurs, USD/CHF is likely to continue its range-bound behaviour.
  • NZD/USD Slides as Bears Maintain Control: The NZD/USD pair dropped 0.60% on Friday to close at 0.5980, hitting levels not seen since August. The pair remains under selling pressure, with a bearish crossover forming as the 20-day SMA approaches the 100-day SMA. With resistance capped by the 100-day SMA at 0.6100, and the 200-day SMA at 0.6150, further declines are likely. Key support has shifted to below 0.5980, with bears eyeing additional downside if current momentum holds.
  • Gold Nears Key Resistance Amid Geopolitical Tensions: Gold prices continued their upward trajectory, closing near $2,746 after briefly testing the $2,750 resistance level. The precious metal maintained support above the 50-period SMA at $2,715, reflecting strong buying interest amid ongoing geopolitical concerns. Should prices break above $2,750, the next target could be the $2,780 level. Conversely, if gold pulls back, key support remains at $2,715, with a further dip potentially testing $2,680.

Market Movers:

  • Tapestry Surges on Court Ruling While Capri Plummets: Shares of Tapestry soared 13.5% after a judge ruled in favour of the Federal Trade Commission’s case to block its acquisition of Capri. In contrast, Capri’s stock nosedived 48.9%, reflecting investor disappointment over the halted acquisition.
  • L3Harris Technologies Gains on Earnings Beat: Defence company L3Harris Technologies rose 3.5% after reporting strong third-quarter results, surpassing analyst expectations. The company raised the lower end of its full-year earnings forecast, now projecting adjusted earnings between $12.95 and $13.15 per share, up from the previous range of $12.85 to $13.15. Analysts had estimated earnings of $13.04 per share.
  • Colgate-Palmolive Slips Despite Beating Estimates: Colgate-Palmolive fell more than 4%, even though its third-quarter earnings exceeded consensus. The company reported adjusted earnings of 91 cents per share on revenue of $5.03 billion, surpassing forecasts of 89 cents per share and $5 billion in revenue. However, a reduction in the lower end of its annual sales estimate weighed on investor sentiment.
  • Western Digital Jumps on Earnings Surprise: Western Digital shares climbed 4.7% after posting better-than-expected earnings of $1.78 per share in the fiscal first quarter, beating analysts’ forecasts of $1.72 per share. However, revenue came in slightly below expectations at $4.1 billion, compared to the anticipated $4.12 billion.
  • Digital Realty Trust Rallies on Record Lease Bookings: Digital Realty Trust surged 9.6% after reporting record lease bookings for the third quarter. The company also updated its full-year guidance for core funds from operations, narrowing it to a range of $6.65 to $6.75 per share, close to analysts’ estimate of $6.69.
  • Coursera Drops on Weak Guidance Despite Q3 Beat: Shares of Coursera fell 9.7% after the company issued fourth-quarter revenue guidance between $174 million and $178 million, aligning with expectations but raising concerns about future demand and retention trends. The online education provider reported third-quarter results that surpassed forecasts on both top and bottom lines.
  • ResMed Climbs After Topping Estimates: ResMed, a medical equipment manufacturer, gained over 7% after reporting better-than-expected fiscal first-quarter results. The company announced adjusted earnings of $2.20 per share on revenue of $1.22 billion, beating analyst expectations of $2.05 per share and $1.19 billion in revenue.
  • Booz Allen Hamilton Jumps on Strong Quarterly Performance: Shares of Booz Allen Hamilton surged 9.2% following an upbeat fiscal second-quarter report. The defence contractor posted adjusted earnings of $1.81 per share on revenue of $3.15 billion, surpassing estimates of $1.47 per share and $2.97 billion in revenue. The company also raised its full-year earnings and revenue growth guidance, further boosting investor confidence.

As the trading week concluded, markets displayed a mixed performance marked by contrasting sectoral trends and investor caution ahead of key events. The Nasdaq reached an all-time high, driven by gains in megacap tech stocks, while the S&P 500 and Dow ended the week on a down note, each breaking their respective multi-week winning streaks. European and Asia-Pacific markets showed uneven results, with European stocks weighed down by earnings disappointments from companies like Mercedes and Remy Cointreau, while Japan’s Nikkei fell on easing inflation ahead of upcoming elections. Treasury yields continued to edge upward, keeping pressure on equities, and oil prices surged amid Middle East tensions and US election concerns. With investors bracing for geopolitical developments, economic data releases, and corporate earnings in the coming week, markets are set to remain in a delicate balance as they seek direction amid an uncertain global landscape.