The S&P 500 edged higher on Tuesday, achieving yet another record close as investors remained optimistic ahead of key economic data later this week. Despite mixed performances across major indices, the Nasdaq Composite joined the S&P 500 in setting new milestones, driven by strength in the technology sector. Meanwhile, the Dow Jones Industrial Average lagged behind, weighed down by investor apprehension surrounding Friday’s upcoming jobs report and its potential implications for Federal Reserve policy decisions. Global markets also presented a mixed picture, with gains in Europe and Asia offset by ongoing economic and political uncertainties, adding a layer of complexity to the market outlook.

Key Takeaways:

  • S&P 500 Sets Another Record Close: The S&P 500 added 0.05%, ending the day at a new record close of 6,049.88. This marks yet another milestone in the index’s upward trajectory, driven by optimism surrounding technological innovation and expectations of stable monetary policy. 
  • Nasdaq Composite Reaches Intraday and Closing Highs: The Nasdaq Composite rose 0.40% to close at 19,480.91, setting both intraday and closing records during the session. The tech-heavy index outperformed its peers, bolstered by advances in technology and semiconductor stocks. 
  • Dow Jones Underperforms: The Dow Jones Industrial Average slipped 76.47 points, or 0.17%, to close at 44,705.53. Despite strong performances in other indices, the Dow has shown signs of slowing momentum. The index’s subdued performance reflects a cautious tone among investors as they await Friday’s November jobs report, which is expected to shed light on the labour market’s recovery trajectory.
  • US Job Openings Surpass Expectations: October job openings rose to 7.74 million, exceeding the Dow Jones estimate of 7.5 million and marking a 372,000 increase from September’s total. However, hiring declined by 269,000, bringing the hiring rate down to 3.3%. These mixed signals highlight the complexity of the labour market recovery ahead of the Federal Reserve’s December policy meeting.
  • European Markets Gain Amid Political Uncertainty in France: European markets posted gains on Tuesday, driven by optimism across sectors despite political turbulence in France. The STOXX 600 index rose 0.44%, with retail stocks leading the way, climbing 1.56%. The FTSE 100 added 46.52 points, or 0.56%, closing at 8,359.41, while Germany’s DAX surpassed the 20,000 level for the first time, marking its fourth consecutive session of gains. France’s CAC 40 increased 0.3% to 7,255, supported by advances in luxury and industrial stocks, even as opposition parties prepared a no-confidence vote against Prime Minister Michel Barnier’s government. Italy’s FTSE MIB rose 1% to 33,829, reaching a two-week high, while the Swiss Market Index was little changed after inflation figures aligned with expectations at 0.7% year-on-year.
  • Asia-Pacific Markets Track Wall Street Gains: Asian markets rallied on Tuesday, mirroring Wall Street’s record-setting session. Japan’s Nikkei 225 surged 2.22%, supported by strength in chip-related stocks such as Tokyo Electron (+4.7%) and Lasertec (+6.7%). South Korea’s Kospi climbed 1.71%, and the Kosdaq rose 2.03%, even as inflation ticked higher to 1.5% year-on-year. The South Korean won initially weakened against the US dollar, trading as much as 2.7% lower, but pared losses to end 1% down after President Yoon Suk Yeol announced he would lift the nation’s first martial law order in over four decades. In China, the CSI 300 inched up 0.11% to 3,951.89 amid ongoing speculation about policy support for the property sector. Meanwhile, Hong Kong’s Hang Seng added 0.65% in late trading, and Australia’s S&P/ASX 200 gained 0.56%, closing at 8,495.2. The strong performance in the region was further lifted by resilience in major chipmakers, with Taiwan Semiconductor Manufacturing Company (TSMC) advancing 2.4%.     
  • Oil Prices Surge Ahead of OPEC+ Meeting: Oil prices climbed more than 2% on Tuesday, with Brent crude futures rising $1.79 (2.49%) to $73.62 per barrel, while US West Texas Intermediate crude added $1.84 (2.7%) to close at $69.94. Investors anticipate OPEC+ will extend its production cuts until at least the end of the first quarter of 2025, with Saudi Arabia expected to lower crude prices for Asian buyers.

FX Today:

  • EUR/USD Struggles Amid Persistent Dollar Strength: EUR/USD traded near 1.0508 on Tuesday, reflecting continued weakness in the euro as economic prospects in the eurozone remain subdued. The pair failed to recover above key technical levels, including the 50-SMA at 1.0542, the 100-SMA at 1.0643, and the 200-SMA at 1.0681. Immediate support lies at 1.0450, a break below which could expose the pair to further downside toward the 1.0400 level. Resistance is seen at 1.0542, but the bearish structure remains dominant, driven by softer eurozone economic data and persistent dollar strength.
  • GBP/USD Holds Near Support Levels: GBP/USD hovered around 1.2670, consolidating after recent declines. The pair remains below all major moving averages, with the 50-SMA at 1.2664 and the 200-SMA at 1.2815 capping any upside potential. Weak UK retail sales data, which showed a 3.3% year-on-year decline in November, failed to provide a positive catalyst. Immediate support is at 1.2600, and a break below this level could drive the pair lower to test 1.2550. Resistance at 1.2664 and 1.2750 remains a challenge for any sustained recovery.
  • USD/JPY Edges Higher as Dollar Recovers: USD/JPY traded near 149.45, rebounding modestly as dollar buyers returned following recent losses. The pair faces immediate resistance at the 50-SMA at 151.98, while the broader bearish bias persists with the 100-SMA and 200-SMA at 153.41 and 152.83, respectively. On the downside, support at 148.00 remains critical; a break below this level could open the door to further declines toward 147.00. For now, the pair remains in a consolidation phase, awaiting further cues from economic data and central bank commentary.
  • AUD/USD Remains Under Pressure: AUD/USD hovered around 0.6480, struggling to break above key resistance levels. The 50-SMA at 0.6494 and the 200-SMA at 0.6559 continue to act as formidable barriers. Persistent dollar strength, coupled with subdued risk sentiment, weighed on the Australian dollar. Immediate support lies at 0.6450, and a breach below this level could accelerate losses toward 0.6400. Any recovery attempt would require a break above the 50-SMA, targeting 0.6559.
  • Gold Stays Range-Bound Amid Market Uncertainty: Gold traded near $2,642 on Tuesday, lacking clear directional momentum. Resistance at $2,651 (50-SMA) and $2,679 (200-SMA) continues to limit the upside, while support at $2,620 remains critical. The precious metal remains range-bound as traders weigh geopolitical risks and inflation concerns against rising Treasury yields and a strong USD. A break below $2,620 could signal further downside, potentially testing $2,600. Conversely, a decisive push above $2,651 would shift focus to $2,679 and higher levels, signalling a potential recovery. For now, gold continues to consolidate in a tight range, reflecting broader market uncertainty.

Market Movers:

  • AT&T Surges on Optimistic Guidance: AT&T stock jumped over 4% as the company forecast more than $18 billion in free cash flow by 2027. The telecom giant unveiled a three-year strategic plan, which includes doubling its fibre internet availability and enhancing its 5G network infrastructure, boosting investor confidence in its long-term growth outlook.
  • Upstart Holdings Rallies on Upgrade: Shares of Upstart Holdings soared 8% after Redburn Atlantic upgraded the AI-powered lending marketplace to “buy.” Analysts at Redburn stated that the company has moved past its challenges and is now poised for significant growth, with “the best yet to come.”
  • Credo Technology Group Skyrockets on Strong Earnings: Credo Technology Group shares surged 47% after reporting fiscal second-quarter revenue of $72 million, surpassing analysts’ expectations of $67 million. The company also posted adjusted earnings of 7 cents per share, beating the forecast of 5 cents. Credo issued higher revenue guidance for the current quarter, further fuelling investor enthusiasm.
  • Cleanspark Drops on Weak Revenue Figures: Bitcoin miner Cleanspark’s stock declined nearly 4% after reporting fiscal year 2024 revenue of $379 million, falling short of the consensus estimate of $395 million. The disappointing results overshadowed positive developments in the cryptocurrency market, pushing shares lower.
  • FedEx Slides on Downgrade: FedEx shares dropped 4.7% after Bernstein downgraded the logistics giant to “market perform” from “outperform.” The investment bank cited concerns about the company’s ability to meet high expectations surrounding the potential spinoff of its less-than-truckload business, dampening investor sentiment.

As markets close on Tuesday, the S&P 500 and Nasdaq Composite extended their record-breaking runs, boosted by strength in technology and AI-driven sectors, while the Dow underperformed, reflecting investor hesitation ahead of Friday’s critical jobs report. European markets also showed resilience, with the DAX breaking a historic milestone and the CAC 40 navigating political uncertainty in France. Meanwhile, Asian markets mirrored Wall Street’s gains, with Japan’s Nikkei leading the region on the back of strong performances in semiconductor stocks. Rising oil prices ahead of the OPEC+ meeting and range-bound gold trading underline the ongoing market complexity, as traders weigh geopolitical risks, labour market trends, and Federal Reserve policy expectations. All eyes now turn to the upcoming economic releases and their potential impact on shaping global market sentiment.