Wall Street closed out a strong week with the Dow Jones Industrial Average reaching a record high, driven by investor rotation into economically sensitive sectors like consumer discretionary and industrials. The S&P 500 extended its winning streak, while the Nasdaq struggled as tech heavyweights Nvidia and Alphabet faced declines. Meanwhile, European and Asian markets delivered mixed performances, as weak economic data in Europe and China weighed on sentiment, offsetting optimism around easing inflation in Japan and strong GDP growth in Singapore. Amid heightened volatility, gold maintained its upward momentum as a safe haven, and oil prices surged on geopolitical tensions and supply concerns.

Key Takeaways:

  • Dow Hits Record High with Over 400-Point Gain: The Dow Jones Industrial Average soared 426.16 points, or 0.97%, to close at a record high of 44,296.51, its third straight positive session. For the week, the Dow climbed approximately 2%, driven by strength in cyclical sectors like consumer discretionary and industrials as investors rotated out of technology-heavy stocks. 
  • S&P 500 Extends Winning Streak to Five Days: The S&P 500 rose 0.35% to close at 5,969.34 on Friday, marking its fifth consecutive day of gains. The index gained 1.7% for the week, led by robust performances in industrials and retail stocks. In contrast, communication services lagged as the rotation into more economically sensitive areas persisted. 
  • Nasdaq Gains Amid Tech Weakness: The Nasdaq Composite edged higher by 0.16% to close at 19,003.65. However, its gains were tempered by sharp declines in major tech names, with Nvidia dropping 3.2% and Alphabet falling 1.7%. Despite the sector’s struggles, the Nasdaq managed a weekly gain of 1.7%, supported by pockets of strength in smaller tech and software stocks.
  • European Markets Close Higher Despite Weak Economic Data: European stocks rallied on Friday, with the Stoxx 600 climbing 1.18%. The UK’s FTSE 100 jumped 1.4% to 8,262.08, its best session since August, closing the week up 2.46%. Germany’s DAX rose 1% to 19,323, and France’s CAC 40 added 0.58%. This strong performance came despite weak PMI data across the region, including the eurozone composite PMI, which fell to 48.1, signalling contraction in business activity. Germany’s composite PMI dropped to 47.3, while its services PMI declined to 49.4, signalling persistent challenges in Europe’s largest economy.
  • Asia-Pacific Markets Deliver Mixed Results: Asia-Pacific stocks were mixed, with Japan’s Nikkei 225 rising 0.68% to 38,283.85 and South Korea’s Kospi gaining 0.83% to 2,501.24. However, China’s markets faltered, with the CSI 300 plummeting 3.1% to 3,865.7 and Hong Kong’s Hang Seng index dropping 2.2%. Singapore’s Q3 GDP exceeded expectations, expanding 5.4% year-on-year, prompting an upward revision of the nation’s full-year growth projection to 3.5%. 
  • Treasury Yields Reflect Mixed US Economic Data: The 10-year Treasury yield dipped slightly to 4.412%, down 2 basis points, while the 2-year yield rose by nearly 3 basis points to 4.377%. Investors digested a mixed bag of economic data, including rising jobless claims, stronger flash PMI readings, and a downward revision to the University of Michigan’s consumer sentiment index for November, which was revised to 71.8 from an initial 73.0.
  • Oil Prices Surge Over 5% Amid Geopolitical Tensions: Brent crude climbed 1.27% to settle at $75.17 per barrel, while WTI gained 1.63% to close at $71.24. For the week, Brent rose nearly 6%, and WTI finished 6.3% higher, as escalating geopolitical tensions surrounding the Ukraine conflict raised concerns over potential disruptions to global oil supply.

FX Today:

  • Gold Finds Resilience Amid Safe-Haven Demand: Gold has continued its bullish momentum, closing firmly above $2,700 as geopolitical tensions and a softer US dollar drove demand for safe-haven assets. The metal is supported by strong levels at the 200-period SMA near $2,680, with further backing from the 50-period SMA at $2,617 and the 100-period SMA at $2,659. Traders are now eyeing the next major resistance level at $2,750. Momentum indicators, including RSI, suggest that bulls remain firmly in control. However, a break below $2,680 could weaken sentiment, potentially opening the door for a decline toward $2,600, a critical historical support level.
  • USD/JPY Tests Key Resistance: USD/JPY consolidated near 154.80, as the pair faced significant resistance at the psychological level of 155.00. The broader upward trend remains intact, with the pair holding above the 200-period SMA at 152.34. Immediate resistance is seen at the 50-period SMA at 154.96, while the 100-period SMA at 153.96 provides support. A breakout above 155.00 could pave the way for gains targeting 156.50 and 157.00. However, with RSI nearing overbought territory, there is a risk of a pullback, potentially toward 153.50 or even the key 152.34 level.
  • USD/CHF Extends Recovery Toward Critical Level: USD/CHF rose to 0.8942, continuing its recovery as the pair benefitted from a stronger US dollar and risk-off sentiment. The bounce from the 200-period SMA at 0.8710 lifted the pair above the 50-period SMA at 0.8857 and the 100-period SMA at 0.8783, which now act as support levels. The next major target is the psychological 0.9000 level, with further gains potentially reaching 0.9100. Failure to break 0.9000 could trigger a pullback toward 0.8857, with a deeper decline exposing the 200-period SMA at 0.8710.
  • GBP/USD Extends Slide As Bears Dominate: GBP/USD traded near 1.2533, reflecting persistent bearish momentum as the pair remained below key moving averages. The 50-period SMA at 1.2654, the 100-period SMA at 1.2790, and the 200-period SMA at 1.2902 underscore the strength of the downtrend. Immediate support lies at the psychological 1.2500 level, with further downside targets at 1.2400 and 1.2300. A recovery above 1.2650 could signal a shift in sentiment, though resistance at the 100-period SMA at 1.2790 remains a critical hurdle.
  • EUR/USD Plunges As Bearish Momentum Accelerates: EUR/USD dropped to 1.0417, extending its downtrend as the US dollar’s strength dominated the forex market. The pair remains below key levels, including the 50-period SMA at 1.0547 and the 200-period SMA at 1.0765, reflecting sustained bearish momentum. Immediate support is at 1.0400, with parity at 1.0000 as the next major downside target. While RSI indicators show oversold conditions, recovery attempts are likely to face resistance at 1.0547 and 1.0670.

Market Movers:

  • Elastic Surges on Earnings Beat: Shares surged nearly 15% after the software company topped Wall Street’s expectations for its fiscal second-quarter results. Elastic posted adjusted earnings of 59 cents per share on revenue of $365 million. Meanwhile, analysts surveyed by LSEG expected it to earn 38 cents per share on revenue of $357 million.
  • Reddit Drops Amid Stake News: The stock fell more than 7% after Bloomberg, citing a person familiar with the matter, reported that Advance Magazine Publishers is looking to establish a credit facility using as much as $1.2 billion of its stake in Reddit.
  • Gap Climbs on Upgraded Guidance: The stock jumped almost 13% on the heels of the clothing retailer increasing its full-year outlook — its third time doing so this year. The company now anticipates sales will advance between 1.5% and 2%. Gap had said in its prior forecast that sales would be “up slightly.”
  • Super Micro Computer Extends Weekly Rally: Shares moved more than 11% higher, extending its more than 15% gain in the previous session. The stock has been having a monster rally this week, with shares up more than 73% week to date, on the heels of the company naming BDO as its new auditor and providing plans to the Nasdaq about how it will remain in compliance with the exchange’s rules.
  • StoneCo Gains on Share Repurchase Plan: Shares jumped more than 10% after the Brazilian payments company announced a share repurchase program of up to 2 billion reais. The program has no fixed expiration date, according to the company.
  • Deckers Outdoor Hits All-Time High: The shoemaker added more than 5% and hit an all-time intraday high following Needham’s initiation at a buy rating. Needham called Deckers “one of the highest-quality companies in our coverage” and added the stock to its conviction list.
  • MicroStrategy Rebounds as Bitcoin Nears Key Level: Shares of the bitcoin development company rose more than 6%, reversing the more than 16% of losses seen in the previous session. The gains come as bitcoin moved closer toward $100,000 during Friday’s trading session after breaching $99,000 for the first time on Thursday.
  • Texas Pacific Land Jumps on S&P 500 Inclusion: The stock jumped more than 14% on news that the landowner will be joining the S&P 500, replacing Marathon Oil following ConocoPhillips’ acquisition of that company. Its inclusion on the index will take effect Tuesday.

As the week concluded, the Dow Jones Industrial Average reached an all-time high, supported by a rotation into cyclical sectors, while the S&P 500 extended its winning streak, reflecting resilience in broader markets. However, the Nasdaq faced pressure from declines in major tech stocks, highlighting persistent sectoral challenges. European markets posted strong gains despite weak PMI data, as investors anticipated central bank rate cuts, while Asian markets saw mixed results, with Chinese equities underperforming. Gold surged above $2,700 as geopolitical tensions drove safe-haven demand, and oil prices ended the week higher, lifted by supply concerns amid escalating conflict in Ukraine. With Bitcoin nearing the critical $100,000 milestone and small-cap stocks outperforming, market sentiment showed signs of strength, even as investors kept a watchful eye on potential headwinds from slowing economic data and central bank decisions.