The US stock market ended the week on a sour note, with the Dow Jones Industrial Average shedding over 300 points on Friday as postelection optimism gave way to mounting concerns about interest rates. The S&P 500 and Nasdaq also registered steep losses, driven by declines in technology and pharmaceutical stocks. Federal Reserve Chair Jerome Powell’s recent comments, emphasising a measured approach to rate cuts, compounded investor caution, while mixed retail sales data painted a murky picture of consumer resilience. As markets grapple with these uncertainties, the postelection rally has lost momentum, setting the stage for a volatile start to the coming week.

Key Takeaways:

  • Dow Drops Over 300 Points Amid Rate Worries: The Dow Jones Industrial Average fell sharply by 305.87 points, or 0.70%, to close at 43,444.99 on Friday. The Dow also posted a weekly loss of 1.2%, marking the end of a postelection rally that initially lifted investor sentiment earlier in the week.
  • S&P 500 Suffers Broad-Based Declines: The S&P 500 slipped 1.32%, finishing at 5,870.62, as multiple sectors saw significant losses. Pharmaceutical stocks dragged the index lower, with Amgen and Moderna tumbling 4.2% and 7.3%, respectively, amid concerns over regulatory policy changes. This marked a challenging week for the benchmark index, which recorded a 2.1% decline over the last five sessions.
  • Nasdaq Falls Over 2% as Tech Stocks Slump: The Nasdaq Composite dropped 2.24%, closing at 18,680.12, driven by steep losses in major technology names. Nvidia, Meta Platforms, Alphabet, and Microsoft all tumbled as the information technology sector became the worst performer within the S&P 500, sliding more than 2%. However, Tesla emerged as a rare bright spot, gaining 3% and mitigating some of the broader index losses.
  • Retail Sales Edge Higher, Beating Expectations: US retail sales rose 0.4% in October, slightly exceeding economists’ forecasts of 0.3%. This followed a revised 0.8% increase in September, indicating a modest but slowing pace of consumer spending as the holiday season approaches. 
  • Treasury Yields Tick Higher Amid Fed Caution: The yield on the 10-year Treasury note rose by about two basis points to 4.439%, while the 2-year Treasury note saw a smaller increase of roughly one basis point, closing at 4.307%. Federal Reserve Chair Jerome Powell reiterated that the central bank was in no rush to cut rates, signalling that strong economic growth provides the flexibility for a measured approach to monetary policy.
  • Oil Posts Weekly Loss on Surplus Concerns: Crude oil prices faced pressure throughout the week, with US crude falling nearly 5% and Brent crude declining almost 4%. West Texas Intermediate closed at $67.02 per barrel, down 2.45% on Friday, while Brent settled at $71.04 per barrel, down 2.09%. Persistent concerns about a looming global surplus, combined with weak demand in China, weighed heavily on the energy market.
  • European Markets Log Fourth Straight Weekly Loss: The pan-European Stoxx 600 fell 0.76% on Friday, marking its fourth consecutive weekly decline. Media stocks led the losses with a 3% drop, while healthcare names faced heavy selling pressure, down 3.01%. Germany’s DAX dipped 0.27%, France’s CAC 40 fell 0.51%, and the UK’s FTSE 100 edged down 0.09% to close at 8,063.61. In the UK, GDP grew by only 0.1% in the three months to September, falling short of the 0.2% growth expected and down from the 0.5% expansion seen in the second quarter. 
  • Asian Markets Mixed Amid Economic Data Releases: Asia-Pacific markets displayed a mixed performance on Friday. Japan’s Nikkei 225 rose 0.28% to close at 38,642.91 after GDP data showed a 0.3% year-on-year expansion in the third quarter, marking a reversal from prior contractions. Meanwhile, China’s CSI 300 fell 1.75% to 3,968.83, as industrial production and investment data missed forecasts despite better-than-expected retail sales growth. South Korea’s Kospi closed marginally lower at 2,416.86, while Australia’s S&P/ASX 200 rose 0.74% to 8,285.2, lifted by gains in consumer staples.

FX Today:

  • EUR/USD Extends Decline Amid Key SMA Rejections: EUR/USD closed at 1.0526, continuing its downward trajectory as it struggled to hold above key resistance levels. Earlier attempts to breach the 50-period SMA at 1.0669 were met with strong selling pressure, with additional resistance observed at the 100-period SMA at 1.0756 and the 200-period SMA at 1.0837. The failure to overcome these levels reinforced bearish sentiment, pushing the pair closer to the psychological support at 1.0500. If the pair breaks below this level, further declines could deepen, while any recovery would require a decisive close above the 50-period SMA at 1.0669. Traders remain focused on downside risks, with the 1.0500 level acting as a key inflection point.
  • GBP/USD Slides Further as Key Averages Hold Firm: GBP/USD ended the session at 1.2609, with bearish momentum dominating price action. The pair repeatedly failed to break above the 50-period SMA at 1.2826, with additional resistance from the 100-period SMA at 1.2894 and the 200-period SMA at 1.2982. These technical barriers capped any recovery attempts, leaving the pair vulnerable to further losses. Immediate support lies at 1.2550, a level buyers may attempt to defend. However, sustained upside would require a close above the 50-period SMA, a feat that appears challenging given the current sentiment. The downtrend remains intact while below these key moving averages.
  • USD/CHF Gains Strength as Bulls Take Control: USD/CHF closed at 0.8881, reflecting bullish sentiment as the pair maintained its position above key moving averages. The breakout above the 50-period SMA at 0.8796 signalled a shift in momentum, supported by additional strength above the 100-period SMA at 0.8727 and the 200-period SMA at 0.8661. The next resistance level lies at 0.8900, with further upside possible toward 0.8950 if momentum continues. On the downside, any retracement below the 50-period SMA could prompt caution among buyers, though the overall trend remains bullish while the pair trades above the 100-period SMA at 0.8727.
  • AUD/USD Faces Pressure as Bears Hold Control: AUD/USD settled at 0.6456, maintaining a bearish outlook as the pair repeatedly failed to overcome critical moving averages. Resistance at the 50-period SMA at 0.6553, along with the 100-period SMA at 0.6572 and the 200-period SMA at 0.6655, kept the pair under pressure. Immediate support is expected at 0.6400, a level that could attract buying interest. However, any recovery attempt would require a close above the 50-period SMA, with significant challenges remaining at higher levels. The bearish bias persists while the pair remains below these moving averages.
  • Gold Retreats After Testing Key Resistance Levels: Gold prices pulled back to close at $2,562.38, reversing gains after encountering strong resistance at critical moving averages. The precious metal attempted to rally earlier in the session, reaching as high as $2,634.62 near the 50-period SMA, but failed to sustain momentum. With both the 100-period SMA at $2,692.26 and the 200-period SMA at $2,681.18 acting as formidable barriers, bearish sentiment returned. Immediate support lies at $2,550, with a potential test of lower levels if sellers maintain control. For bulls to regain footing, a close above $2,634.62 would be essential, though significant resistance at higher levels remains a hurdle.

Market Movers:

  • Global Pharmaceutical Stocks Slide on Leadership Concerns: Pharmaceutical stocks faced a steep sell-off after President-elect Donald Trump announced Robert F. Kennedy Jr., a prominent vaccine sceptic, as his choice to lead the Department of Health and Human Services. Moderna led the decline, tumbling 7.3%, while Pfizer fell 4.7%. BioNTech, which partnered with Pfizer to develop a Covid-19 vaccine, dropped 3.7%. Other healthcare giants were not spared, with GSK shedding 1.9%, Eli Lilly slipping 3.4%, and Novo Nordisk declining nearly 5%. The SPDR S&P Biotech ETF (XBI) plummeted over 5%, marking its worst week since 2020.
  • Alibaba Slips on Weak Revenue Results: Shares of Alibaba fell 2.2% after the Chinese e-commerce giant reported fiscal second-quarter sales of 236.5 billion yuan, missing analysts’ expectations of 238.9 billion yuan. While revenue grew 5% year-on-year, the weaker-than-expected results reflect the impact of a slowing consumer backdrop in China.
  • Palantir Surges on Nasdaq Listing Move: Palantir shares jumped 11.1% after the analytics software company announced plans to switch its listing from the New York Stock Exchange to the Nasdaq Global Select Market. The move positions Palantir for potential inclusion in the Nasdaq-100 Index, boosting investor sentiment.
  • Domino’s Pizza Slides Despite Berkshire Stake: Domino’s Pizza shares slipped 1.3% after Warren Buffett’s Berkshire Hathaway disclosed a new stake in the company. The dip came amid broader market pressures, despite the conglomerate’s investment adding a vote of confidence. Meanwhile, Pool Corp., another recipient of Berkshire’s interest, gained 0.5%. On the flip side, Ulta Beauty plunged 4.6% as Berkshire revealed it had sold nearly 97% of its position in the retailer, just months after acquiring it.
  • AST SpaceMobile Plunges on Weak Earnings: AST SpaceMobile shares nosedived 9.6% after the company reported third-quarter results that fell far short of expectations. The company posted a loss of $1.10 per share on revenue of $1.1 million, significantly missing analysts’ forecasts of a $0.20 loss per share and $1.8 million in revenue.

As the week came to a close, global markets faced heightened volatility driven by mixed economic data, cautious central bank commentary, and corporate earnings disappointments. The Dow dropped over 300 points, signalling growing investor unease about the Federal Reserve’s measured stance on rate cuts. European markets registered their fourth consecutive weekly decline, with weak UK GDP figures adding to the region’s woes, while Asian markets remained mixed as China’s economic data revealed uneven recovery signals. The slump in pharmaceutical stocks, led by Moderna and Pfizer, added to the day’s pessimism, while Palantir’s surge on a Nasdaq listing move provided a rare bright spot. With oil prices retreating on surplus concerns and retail sales offering modest reassurance, investors are bracing for further fluctuations as market participants assess the interplay of policy shifts, economic resilience, and corporate outlooks in the weeks ahead.