US markets saw a downturn on Wednesday in light pre-holiday trading as investors took profits from recent gains, particularly in the technology sector. The S&P 500 snapped a seven-day winning streak, while the Nasdaq and Dow also closed lower, reflecting cautious sentiment following weaker-than-expected earnings guidance from Dell and HP. Meanwhile, the Federal Reserve’s preferred inflation gauge, the PCE price index, came in as expected, offering little surprise but keeping speculation alive about the central bank’s next moves. With volumes thinning ahead of the Thanksgiving break, markets continue to digest mixed economic signals and corporate earnings, while global indices remain impacted by geopolitical and macroeconomic uncertainties.

Key Takeaways:

  • S&P 500 Snaps Winning Streak: The S&P 500 fell 0.38% to close at 5,998.74, ending a seven-day winning streak that had brought it to all-time highs earlier in the week. November has been a strong month for the index, with gains exceeding 5% so far. However, pre-holiday trading volumes were about 20% lower than usual.
  • Nasdaq Drops on Tech Weakness: The Nasdaq Composite lost 0.6%, finishing at 19,060.48 as major tech stocks weighed heavily on the index. Nvidia, which has skyrocketed over 173% in 2024, slipped more than 1% on Wednesday. Meta Platforms fell 0.8%, while disappointing earnings guidance sent Dell and HP plunging 12.3% and 11%, respectively. 
  • Dow Jones Dips After Intraday Gains: The Dow Jones Industrial Average dropped 138.25 points, or 0.31%, to 44,722.06, reversing earlier gains of over 140 points at session highs. Despite Wednesday’s decline, the Dow remains up about 1% for the week and has gained more than 7% in November, tracking its largest monthly advance in 2024.
  • Fed’s Preferred Inflation Measure Meets Expectations: The Personal Consumption Expenditures (PCE) price index, the Federal Reserve’s preferred inflation gauge, rose 0.2% in October and 2.3% year-over-year, both in line with forecasts. Excluding food and energy, core PCE increased 0.3% month-over-month and 2.8% annually. These figures suggest steady disinflation but leave room for hawkish interpretations by the Fed as inflationary pressures remain a concern.
  • European Markets Close Lower Amid Tariff and Inflation Concerns: The pan-European Stoxx 600 dipped 0.2%, with most sectors closing in the red. The FTSE 100 inched up 0.2% to 8,274, buoyed by gains in utilities and telecom stocks. In contrast, France’s CAC 40 dropped 0.72% to 7,143, and Germany’s DAX slid 0.18% to 19,261. Italy’s FTSE MIB declined 0.23% to 33,089. Among individual stocks, Aston Martin plunged 5.5% after issuing another profit warning, further rattling investors following a series of disappointing updates. Just Eat Takeaway dropped 2.4% as it announced plans to delist from the London Stock Exchange next month. EasyJet, which initially rose 1.5% on strong full-year profit growth, pared gains and ended the session down 0.4%.
  • Asian Markets Mixed as Chinese Profits Decline: Asia-Pacific markets delivered a mixed performance as traders digested a 10% year-over-year drop in China’s industrial profits for October. Hong Kong’s Hang Seng Index rose 2.45%, and the mainland CSI 300 gained 1.74% to close at 3,907.04, boosted by optimism around potential stimulus measures. Meanwhile, Japan’s Nikkei 225 fell 0.8% to 38,134.97, while South Korea’s Kospi dipped 0.69% to 2,503.06. Australia’s S&P/ASX 200 rose 0.57% to 8,406.7, as inflation data showed stability with October’s 2.1% rise aligning with September levels.
  • Oil Prices Stable Amid Ceasefire and OPEC+ Meeting Anticipation: Brent crude futures rose slightly by 2 cents to settle at $72.83 per barrel, while US West Texas Intermediate (WTI) declined 5 cents to close at $68.72. The market digested news of a ceasefire between Israel and Hezbollah, along with speculation about OPEC+ potentially delaying planned production increases. US crude inventories fell by 5.94 million barrels last week, significantly exceeding analyst expectations of a 600,000-barrel draw.
  • Treasury Yields Decline on Inflation Data: The yield on the 10-year Treasury fell 5 basis points to 4.25%, while the 2-year yield dipped over 3 basis points to 4.223%. The softer yields reflect investor reactions to the PCE inflation data, which met expectations but indicated persistent price pressures. 

FX Today:

  • EUR/USD Struggles Amid Downtrend: EUR/USD traded near 1.0564 on Wednesday, reflecting persistent bearish momentum as the pair remained pressured by weak Eurozone sentiment and a stronger US dollar. The pair failed to breach resistance at the 50-period SMA, which slopes downward near 1.0602, reinforcing the dominance of sellers in the market. Immediate support lies at 1.0550, a critical level that, if breached, could lead to further declines toward 1.0480, a key psychological and technical zone. On the upside, recovery appears limited unless the pair climbs above the 50-period SMA, with further resistance at the 200-period SMA at 1.0725.
  • GBP/USD Attempts to Recover Amid Mixed Sentiment: GBP/USD traded near 1.2676, marking a modest rebound from recent multi-week lows. However, the pair continues to face resistance at the 100-period SMA, currently at 1.2727, a key barrier to further recovery. Despite this bounce, the broader bearish trend remains intact, with the 200-period SMA at 1.2858 well above the current price. Immediate support lies at 1.2620, and a break below this level could trigger a sell-off toward 1.2550. On the upside, sustained buying interest above 1.2727 could pave the way for a test of the 200-period SMA near 1.2850. 
  • NZD/USD Struggles Amid Downward Trend: NZD/USD traded near 0.5896, failing to sustain any meaningful recovery as the pair remained weighed down by risk-off sentiment and weaker commodity prices. Sellers continued to dominate, with the pair trading below all major moving averages, including the 50-period SMA at 0.5905 and the 200-period SMA at 0.5964. Immediate support lies at 0.5880, and a break below this level could open the door to a test of the psychological threshold at 0.5800. Resistance remains capped at the 50-period SMA, with the broader bearish structure limiting upside potential unless there is a significant shift in fundamentals.
  • Gold Consolidates Near $2,640 Amid Mixed Sentiment: Gold traded near $2,637 on Wednesday, maintaining a tight consolidation range as traders balanced mixed market signals. Support remained firm above $2,600, with the 200-period SMA providing critical support near $2,682. On the upside, immediate resistance lies at $2,641, with a break above this level potentially paving the way for a move toward $2,700, a key psychological barrier. Conversely, a decline below $2,600 could lead to further losses toward $2,580. Rising US Treasury yields and stabilising geopolitical tensions have capped gains, while inflation concerns and broader economic uncertainties continue to offer underlying support. 

Market Movers:

  • Dell Technologies Plummets on Weak Guidance: Dell shares dropped 12.3% on Wednesday after the company reported disappointing earnings and forecast lower-than-expected fourth-quarter revenue and earnings. This marks a sharp reversal for the stock, which had surged 86% year-to-date as investors viewed the company as a key player in the artificial intelligence sector. 
  • HP Falls to Lowest Level Since 2020: HP stock tumbled 11%, posting its worst session since 2020, after the company issued weaker-than-expected earnings guidance. The PC maker projected earnings, excluding items, to range between $0.70 and $0.76 per share for the next quarter, well below the consensus estimate of $0.85. 
  • Nordstrom Drops on Sales Slowdown: Shares of Nordstrom fell 8.1% after CEO Erik Nordstrom revealed a slowdown in sales starting in late October. Despite reporting third-quarter revenue of $3.46 billion, which beat the $3.35 billion consensus estimate, concerns over weakening consumer spending led to a sell-off. 
  • Urban Outfitters Surges on Strong Earnings Beat: Urban Outfitters shares soared 18.3% after the retailer reported adjusted earnings of $1.10 per share for the third quarter, well above the $0.86 expected by analysts. Revenue also exceeded expectations, coming in at $1.35 billion compared to the consensus estimate of $1.34 billion. 
  • CrowdStrike Falls on Disappointing Guidance: CrowdStrike shares declined 4.6% after the cybersecurity company provided slightly weaker-than-expected guidance for the fourth quarter. The firm forecasted earnings per share in the range of $0.84 to $0.86, slightly below the $0.86 expected by analysts. 

As the Thanksgiving holiday approaches, the S&P 500 snapped a seven-day winning streak and both the Nasdaq and Dow Jones closed lower amid light trading volumes. The technology sector faced notable pressure, with sharp declines in Dell and HP following disappointing earnings guidance, while retail stocks like Nordstrom struggled against slowing sales momentum. In global markets, European equities slipped under the weight of geopolitical concerns and profit warnings from key companies like Aston Martin, while Asia-Pacific indices showed mixed performance amid weak Chinese industrial profits. With US inflation data aligning with expectations and Treasury yields dipping, traders remain focused on forthcoming economic reports and the Federal Reserve’s next moves, as disinflationary signals and corporate earnings continue to shape sentiment in the weeks ahead.