Equity Rotation, Commodity Moves, Macro Shifts, and Futures Outlook

Index Update:  Investors continued shifting out of high-valuation tech and AI names after a three-day selloff triggered by Oracle’s weak revenue and concerns over heavy AI spending, pressuring stocks like Nvidia, Micron and CoreWeave. However, expectations of Fed rate cuts are helping support broader market sentiment and easing reliance on the “Magnificent Seven.” Lululemon surged 9% after announcing its CEO will step down. For the week, the S&P 500 is up 0.5%, the Dow 1.6%, while the Nasdaq is nearly flat.

Market Movers:  On Thursday, the top gainers were PetMed Express, Inc. (+68.36%), followed by AXIL Brands, Inc. (+59.36%). On the contrary, Enveric Biosciences, Inc. (-47.34%), and Beasley Broadcast Group, Inc. (-47.03%) declined the most the same day.

Commodities Update:  WTI and Brent crude steadied on Friday but remained set for weekly losses of over 3% amid expectations of a global supply surplus, reinforced by the IEA’s forecast of a record glut and rising inventories. OPEC, however, maintained a balanced 2026 outlook. Geopolitical tensions—including U.S. interception of a Venezuelan tanker and Ukraine’s attacks on Russia-linked vessels—added to market volatility.

Gold surged above USD 4,300 per ounce, nearing record highs, supported by expectations of further U.S. rate cuts after weak labor data and the Fed’s dovish stance. Silver held above USD 63 per ounce, close to all-time highs, buoyed by strong physical demand, Fed easing, and tightening supply conditions.

Macro Updates:  The dollar index hovered near two-month lows around 98.3 and was set for a third weekly decline as the Fed’s rate cut and softer policy outlook pressured the currency. Lower Treasury yields—driven by planned Fed purchases of short-dated bills—and a sharp rise in U.S. jobless claims further reinforced dovish expectations. Meanwhile, hawkish repricing in Australia, Canada, and Europe added to dollar weakness, with the largest losses likely against the euro.

Bonds Commentary:  The U.S. 10-year Treasury yield steadied near 4.16% on Friday after a volatile week driven by the Fed’s policy decision. The Fed delivered a widely expected rate cut and adopted a less hawkish tone, signaling no further hikes and projecting one more cut in 2026 and another in 2027. It also announced USD 40 billion in short-dated Treasury purchases to help ease borrowing costs.

Futures Update:  U.S. stock futures were largely flat early Friday, signaling a quiet end to a week marked by major central bank rate decisions and significant AI-sector earnings. Dow futures were up 0.2%, S&P 500 futures were steady, and Nasdaq 100 futures edged down 0.1%.

The major US stock indexes initially moved in starkly opposite directions early in the session; however, the market demonstrated resilience and rallied higher later on. The S&P 500 increased by 14.32 points, or 0.21%, closing at 6,901.01. From a technical perspective, the index held support at important levels and gradually gained upward momentum. It remains above its key moving averages, indicating a bullish trend. The 14-day Relative Strength Index (RSI) remains above the midpoint, further supporting a positive outlook. Key support levels are around 6,730, with resistance expected near 6,977.