Wall Street extended its rally on Thursday, with the S&P 500 and Nasdaq reaching new highs as investors responded to the Federal Reserve’s latest rate cut and the aftermath of the recent US presidential election. Despite some lingering uncertainties, the markets showed resilience, with the Nasdaq closing above 19,000 for the first time and the S&P 500 also notching a record. The Fed’s quarter-point rate reduction provided further support, signalling a cautious but steady approach to managing economic growth. Investors are now closely watching upcoming policy moves and economic indicators to gauge the direction of markets in the months ahead.

Key Takeaways:

  • S&P 500 and Nasdaq Hit Record Highs: The S&P 500 rose 0.74%, closing at an all-time high of 5,973.10. The Nasdaq Composite surged 1.51%, reaching 19,269.46, marking its first close above the 19,000 threshold. Both indices benefited from continued optimism following President-elect Donald Trump’s victory and the Federal Reserve’s latest rate cut.
  • Dow Remains Steady: Despite the overall market rally, the Dow Jones Industrial Average was largely unchanged, dipping less than a point to close at 43,729.34. This pause comes after the Dow’s significant 1,500-point gain in the wake of Trump’s win, highlighting a momentary cooling amidst broader upward momentum.
  • Fed Cuts Rates by 0.25 Percentage Points: The Federal Reserve announced a quarter-point rate cut on Thursday, reducing the federal funds target range to 4.50%-4.75%. This marks a smaller adjustment than the half-point cut in September, signalling a cautious approach amidst economic resilience. Fed Chair Jerome Powell emphasised the Fed’s “feeling good” about the economy, suggesting a gradual path forward without large-scale cuts unless economic conditions change significantly.
  • Treasury Yields Decline Amid Fed Rate Cut: Treasury yields fell in response to the Fed’s decision, with the 10-year yield dropping 12 basis points to 4.32% and the 2-year yield decreasing by 7 basis points to 4.21%. This comes after a substantial rise in yields in the previous session, as markets adjust to the Fed’s gradual approach to rate adjustments.
  • Oil Prices Edge Higher Post-Election and Fed Move: Oil prices rose as investors digested the implications of a Trump presidency and the latest Fed rate cut. Brent crude futures gained 0.73% to close at $75.47 per barrel, while US West Texas Intermediate rose 0.64% to settle at $72.15. The market remains sensitive to potential geopolitical developments, such as increased sanctions on Iran and Venezuela under Trump’s administration and ongoing tensions in the Middle East. A stronger dollar and concerns about demand have limited gains, but potential supply disruptions and increased political risk have provided underlying support.
  • European Markets React Positively to Political Shifts: European markets closed higher as investors digested Donald Trump’s election win and shifting political dynamics in Germany. The pan-European Stoxx 600 index rose 0.7%, with mining stocks leading gains at 3.9%. France’s CAC 40 index climbed 0.82%, while Germany’s DAX surged 1.7%, boosted by the announcement of a confidence vote by Chancellor Olaf Scholz, raising the potential for snap elections after the dismissal of Finance Minister Christian Lindner. The FTSE 100 in the UK ended slightly lower, down 0.32% to 8,140.74, as Bank of England reduced its key interest rate by 25 basis points, bringing it down to 4.75%. 
  • Asian Markets Mixed Amid Strong China Export Data and Post-Election Volatility: Asian markets experienced a day of mixed results following Trump’s election win and unexpectedly strong export data from China. The CSI 300 index in mainland China led the region, jumping 3.02% to close at 4,145.7, boosted by a 12.7% year-over-year surge in exports, the highest in 19 months. Hong Kong’s Hang Seng index also rose 2% by the session close, while South Korea’s Kospi edged up to 2,564.63. However, Japan’s Nikkei 225 dipped 0.43% to 39,381.41, with the broader Topix managing a 1% gain to 2,743.08. Australia’s S&P/ASX 200 advanced 0.33% to 8,226.3.

FX Today:

  • EUR/USD Remains Under Pressure Amid Bearish Sentiment: EUR/USD traded around 1.0797 on Thursday, with the pair struggling to break above key moving averages, signalling continued bearish momentum. Weak economic indicators from the Eurozone, coupled with a strong USD, weighed on the Euro’s recovery attempts. The 200-period SMA at 1.0932 acted as a critical barrier against any meaningful reversal. A drop below the recent support level at 1.0834 could accelerate selling pressure, targeting the next level around 1.0750. Immediate resistance is observed near the 50-period SMA at 1.0823, which, if breached, could indicate a short-term bullish move.
  • GBP/USD Holds Steady in Range-Bound Trading: GBP/USD hovered near 1.2980, showing signs of consolidation as it tested the 200-period SMA at 1.3089, which provided support against further declines. Shorter-term SMAs, such as the 50-period and 100-period, remained sloped downward, reinforcing a bearish bias unless broken to the upside. The pair awaited clearer direction, with the 200-period SMA at 1.2970 serving as key support. A move above the 50-period SMA at 1.2954 could signal bullish potential, with resistance anticipated at 1.3110. Key levels to watch include 1.2970 for support and 1.3110 for resistance.
  • USD/CHF Faces Resistance as Downtrend Persists: USD/CHF traded near 0.8716, encountering resistance from both the 50-period and 100-period SMAs on the 4-hour chart. The overall trend remained bearish, with the price staying below the 200-period SMA, indicating continued seller control. The 50-period SMA at 0.8675 offered initial support on pullbacks, but further declines could test recent lows around 0.8600. Conversely, a move above the 200-period SMA at 0.8595 could suggest a potential trend reversal, although sentiment remains negative. Key support levels are 0.8675 and 0.8600, while resistances lie near 0.8750 and 0.8800.
  • AUD/USD Holds Ground Near Key Support Levels: AUD/USD traded around 0.6676, testing support close to the 50-period SMA at 0.6587. The pair remained in a downtrend, with price staying below the 100 and 200-period SMAs, indicating limited bullish momentum. A break below the 50-period SMA at 0.6587 could lead to further losses, with the next major support around 0.6500. Alternatively, a rise above the 100-period SMA near 0.6625 might signal a short-term bullish opportunity, targeting resistance at 0.6718. Important levels include support at 0.6587 and resistance at 0.6625.
  • Gold Holds Above Key Support Amid Market Volatility: Gold remained resilient, trading above $2,700 as it tested the 200-period SMA multiple times, finding strong support around $2,688. Buyers stepped in to defend this level, while the 50-period and 100-period SMAs above the price suggested slight short-term bearish pressure. Gold faced resistance at $2,739, with a breach above this level potentially signaling renewed bullish momentum. If price breaks below $2,688, further selling could bring it toward the $2,650 level. For now, Gold maintains a bullish stance as long as it remains above the 200-period SMA.

Market Movers:

  • ARM Holdings Gains on Strong Revenue Beat: ARM Holdings Plc rose over 4% after reporting Q2 revenue of $844 million, surpassing analyst expectations of $810.9 million. The positive earnings propelled ARM’s shares, leading gains among chip stocks as the semiconductor sector showed resilience.
  • EPAM Systems Surges on Strong Revenue Outlook: EPAM Systems (EPAM) soared over 14% in the S&P 500 after reporting Q3 revenue of $1.17 billion, beating the consensus of $1.15 billion. The company also raised its Q4 revenue forecast to a range of $1.21 billion to $1.22 billion, well above market expectations of $1.15 billion, bolstering investor confidence.
  • Warner Bros Discovery Jumps on Subscriber Growth: Warner Bros Discovery (WBD) saw its stock rise more than 11% after reporting total Q3 subscribers of 110.5 million, significantly above the expected 109.01 million. The subscriber growth exceeded forecasts, giving the stock a notable boost in the entertainment sector.
  • Ralph Lauren Rises on Improved Revenue Growth Outlook: Ralph Lauren (RL) gained over 6% after raising its 2025 revenue growth estimate to 3%-4%, up from the previous range of 2%-3%, surpassing the consensus forecast of 2.92%. This positive revision lifted investor sentiment, driving the stock higher.
  • Lyft Surges on Strong Q3 Results and Guidance: Lyft (LYFT) jumped over 22%, leading the S&P 500 gainers, after reporting Q3 gross bookings of $4.11 billion, above the expected $4.08 billion. Lyft also forecasted Q4 gross bookings between $4.28 billion and $4.35 billion, ahead of the consensus of $4.23 billion, fuelling investor optimism.
  • MercadoLibre Declines on Lower-Than-Expected EBITDA: MercadoLibre (MELI) dropped more than 16%, marking the biggest loss in the Nasdaq 100, after reporting Q3 adjusted EBITDA of $714.0 million, well below the consensus estimate of $927.7 million, reflecting challenges in its operations.
  • JPMorgan Chase Declines on Downgrade: JPMorgan Chase (JPM) dropped over 4%, leading the Dow Jones Industrials losers, after Baird downgraded the stock to “underperform” from “neutral” and set a price target of $200. The downgrade prompted selling in the stock.
  • Rockwell Automation Slips on Weak EPS Guidance: Rockwell Automation (ROK) fell over 5% after issuing a 2025 adjusted EPS forecast of $8.60 to $9.80, significantly below the consensus of $10.57. The weaker-than-expected guidance raised concerns about the company’s future performance.

As the week wraps up, markets remain on edge amid a mix of encouraging highs and lingering uncertainties. The S&P 500 and Nasdaq’s record closes reflect investor hopes boosted by the Fed’s rate cut, but the path forward is far from settled. Global markets are absorbing fresh challenges, from political shifts in Europe to mixed signals out of Asia. Oil prices edged up, reflecting complex supply concerns, while Treasury yields softened in response to the Fed’s tempered approach. With key economic policies and global developments on the horizon, investors are bracing for continued market turbulence in the coming months.