US markets saw mixed movements on Thursday, with the Dow Jones Industrial Average reaching a new record high, while the Nasdaq found support from a rally in semiconductor stocks. Strong economic data, including robust retail sales and lower-than-expected jobless claims, helped alleviate recession fears, supporting investor sentiment. The S&P 500 slipped slightly down after touching an intraday peak, while the Nasdaq rose on the back of gains in Nvidia and other chipmakers. The upbeat results from Taiwan Semiconductor lifted the broader tech sector, reflecting renewed optimism as investors digested the latest market developments.

Key Takeaways:

  • Dow Reaches New High: The Dow Jones Industrial Average climbed 161 points, or 0.37%, to close at 43,239.05, setting a new record. The gains were driven by strong economic data, which lifted investor confidence and helped alleviate concerns about a potential recession. The rally marked another milestone for the index, as investors showed renewed interest in large-cap stocks.
  • Nasdaq Gains on Chip Stock Rally: The Nasdaq Composite rose 0.04% to 18,373.61, supported by gains in semiconductor stocks. Nvidia climbed 2% during the session, hitting a new all-time high, while AMD also saw a 1% increase. The strong performance of these tech stocks helped offset broader market uncertainties, as investors shifted back into growth sectors like technology.
  • S&P 500 Slips Slightly Despite Record Intraday High: The S&P 500 edged down 0.02% to close at 5,841.47, after reaching a new intraday high earlier in the session. Despite the slight decline, positive economic data, including robust retail sales and jobless claims, helped keep the losses in check. 
  • Strong Consumer Spending and Labour Market Resilience: September’s retail sales rose 0.4%, surpassing the expected 0.3% gain, while sales excluding autos increased 0.5%, well above the 0.1% forecast. This data highlights continued strength in consumer spending. At the same time, jobless claims fell to 241,000 for the week ending October 12, down 19,000 from the previous week and better than the 260,000 estimate. 
  • European Markets Lifted by ECB Rate Cut: European markets posted gains after the European Central Bank (ECB) cut its deposit rate by 25 basis points to 3.25%, marking its third rate cut this year. The pan-European Stoxx 600 rose 0.84%, with major bourses in positive territory. Germany’s DAX advanced 151 points, or 0.77%, while France’s CAC 40 gained 92 points, or 1.22%. The ECB’s decision, aimed at managing inflation risks and addressing a slowing growth outlook, provided a boost to investor sentiment across the region.
  • Asian Markets Mostly Lower Amid China Concerns: Most Asian markets ended lower on Thursday, weighed down by renewed concerns over China’s economic outlook. The CSI 300 index fell 1.13% to 3,788.22, while the CSI 300 real estate index tumbled nearly 8% after a disappointing housing ministry briefing. Hong Kong’s Hang Seng dropped 1.3% to 20,030, reflecting declines in property stocks. Japan’s Nikkei 225 fell 0.69% to 38,911.19 as weaker-than-expected trade data revealed a 1.7% drop in September exports, marking the first contraction this year. Conversely, Australia’s S&P/ASX 200 rose 0.86% to close at 8,355.9, benefiting from a positive labour market report, which saw unemployment dip to 4.1%.
  • Crude Oil Prices Edge Higher After Recent Declines: Crude oil prices rebounded on Thursday after a four-day losing streak. West Texas Intermediate (WTI) crude for November delivery rose 0.44%, or 33 cents, to settle at $70.82 per barrel, while Brent crude for December delivery gained 0.31%, or 23 cents, to close at $74.55 per barrel. The modest recovery came amid ongoing concerns about geopolitical risks in the Middle East, although fears of immediate supply disruptions have eased for now. Investors remain watchful of the evolving situation, which could impact energy markets.

FX Today:

  • EUR/USD Pressured by Strong US Data: The EUR/USD pair remained under pressure on Thursday, closing at 1.0827 as stronger-than-expected US retail sales and lower jobless claims data supported the US Dollar. The pair continues to trade below key moving averages, with immediate resistance at the 50-period SMA of 1.0920. A further decline could see the pair testing support levels around 1.0800, with potential for a dip towards 1.0750 if selling pressure intensifies. A break above 1.0920 is needed to shift the bearish sentiment, but for now, the stronger dollar keeps the pair on the back foot.
  • GBP/USD Holds Near Key Support: GBP/USD ended the session at 1.3013, clinging above the critical 1.3000 level as investors reacted to robust US economic data. The pair faced resistance at the 50-period SMA of 1.3058, while the 100-period SMA at 1.3169 remains a hurdle for any substantial upward movement. Despite the dollar’s strength, support around 1.3000 has kept the pair from deeper losses. A push above 1.3058 could attract more buyers, but failure to clear this level might lead to a retest of the 1.2950 support area.
  • USD/CHF Gains on Improved US Sentiment: USD/CHF extended its upward momentum, closing at 0.8662 on Thursday. The pair held above the 50-period SMA of 0.8599, indicating continued bullish momentum. Key resistance lies at the 200-period SMA near 0.8700, a critical threshold for further gains. A breakout above this level could open the path to 0.8750. However, if the pair fails to breach 0.8700, a pullback towards support at 0.8600 is possible as traders assess the strength of the US economic recovery.
  • AUD/USD Recovers After Strong Labour Data: AUD/USD traded near 0.6695 on Thursday, showing signs of recovery following positive Australian employment data. The pair tested resistance at the 50-period SMA of 0.6719 but struggled to sustain gains above this level. The 100-period SMA at 0.6795 and the 200-period SMA at 0.6769 pose further obstacles to a sustained rally. If AUD/USD manages to hold above the 50-period SMA, a move towards 0.6750 is possible. However, persistent selling pressure could see the pair retesting support levels around 0.6650, with the broader trend remaining bearish unless it clears the 200-period SMA.
  • Gold Extends Rally Amid Market Caution: Gold (XAU/USD) continued its upward trajectory, closing at $2,692, benefiting from a cautious market sentiment despite stronger US economic data. The precious metal remained well above its 50-period SMA at $2,647, signalling ongoing bullish momentum. Immediate resistance is seen near $2,700, a level that could challenge further gains. A break above this key resistance could drive gold prices toward $2,720. Conversely, failure to surpass $2,700 may trigger a pullback, with support expected around $2,647. Despite the stronger dollar, gold’s safe-haven appeal keeps it in a positive trend for now.

Market Movers:

  • Nvidia Gains on New High: Nvidia shares rose 2% on Thursday, reaching a new all-time high as investors returned to tech stocks. The company’s stock benefited from improved sentiment in the semiconductor sector, which helped the Nasdaq Composite edge up 0.04% despite broader market uncertainties.
  • Elevance Health Drops on Disappointing Earnings: Elevance Health shares tumbled 10.59% after the company posted a profit of $8.37 per share for the third quarter, missing analysts’ expectations of $9.66 per share. The health insurer cited “unprecedented challenges” in its Medicaid business, although it reported $44.72 billion in revenue, exceeding the $43.37 billion forecast.
  • Travelers Surges on Earnings Beat: Travelers shares jumped 9% after the insurance company reported third-quarter earnings of $5.24 per share, significantly above the $3.55 per share expected by analysts polled by LSEG. Despite the earnings beat, revenue came in below expectations, but the strong profit numbers drove investor enthusiasm.
  • Lucid Group Tumbles on Stock Offering: Electric vehicle maker Lucid Group saw its stock plunge 17.99% following the announcement of a public offering of nearly 262.5 million shares aimed at raising $1.67 billion. The substantial dilution in share value weighed heavily on the stock, leading to one of its worst trading days in recent months.
  • Blackstone Rallies on Earnings Outperformance: Blackstone shares gained 6.27% after the alternative asset manager posted third-quarter earnings of $1.01 per share on revenue of $2.43 billion, beating the analysts’ estimate of 92 cents per share on revenue of $2.41 billion. The results underscored strong performance in its core investment operations, pushing the stock higher.
  • CSX Declines on Weak Earnings: Shares of CSX Corporation fell 6.71% after the transportation company reported disappointing third-quarter results. The company posted earnings of 46 cents per share on revenue of $3.62 billion, missing the consensus estimates of 48 cents per share and $3.67 billion in revenue, as polled by LSEG.
  • Expedia Rises on Takeover Rumours: Expedia shares surged 4.75% following reports that Uber had explored a potential takeover bid for the online travel company. Although the discussions were described as being at a very early stage, the news spurred investor optimism, pushing Expedia’s stock higher. Conversely, Uber shares slipped 2.44% as investors weighed the potential risks of a major acquisition.

As Thursday’s trading session concluded, market participants found themselves balancing optimism from strong US economic data with caution over mixed signals from global markets. The Dow Jones reached a fresh record high, lifted by robust retail sales and a dip in jobless claims, which highlighted resilience in the US economy. Meanwhile, the Nasdaq gained modestly, supported by a rally in semiconductor stocks, while the S&P 500 saw a slight decline after reaching an intraday peak. European markets rose on the back of the ECB’s third rate cut, while most Asian markets struggled, reflecting continued concerns about China’s economic outlook. Despite renewed strength in the US dollar, gold prices extended their rally, as investors maintained a cautious stance amidst geopolitical uncertainties. With market sentiment swaying between optimism and caution, all eyes remain on the next economic data releases and their potential impact on global market dynamics.