Fed Easing Expectations Lift Equities, Commodities Mixed, Dollar Steady

Index Update:  U.S. stock futures edged higher on Friday, extending the prior session’s strong gains as expectations of further Federal Reserve rate cuts supported sentiment. Oracle and Micron led premarket advances, while Nike weighed on the market after weak China sales and margin pressure. For the week, the S&P 500 and Dow Jones are higher, while the Nasdaq remains in negative territory.

Market Movers:  On Thursday, the top gainers were Aimei Health Technology Co., Ltd (+100.81%), followed by Athira Pharma, Inc. (+62.52%). On the contrary, Gain Therapeutics, Inc. (-44.44%), and Processa Pharmaceuticals, Inc (-41.62%) declined the most the same day.

Commodities Update:  Oil prices continued to slide, with WTI and Brent futures extending a second straight weekly decline as oversupply concerns and softening demand in China and the U.S. outweighed geopolitical risks, leaving prices down about 20% year to date. In contrast, precious metals remained strong: gold traded near its record high around USD 4,320 per ounce on expectations of U.S. rate cuts and geopolitical uncertainty, while silver hovered near record levels, supported by safe-haven demand, strong industrial usage, and tight supply, with both metals posting strong weekly and year-to-date gains.

Macro Updates:  U.S. capital flows recorded a net outflow of USD 37.3 billion in October 2025. While foreign investors increased holdings of long-term U.S. securities by USD 38.9 billion—driven by private investor purchases despite selling by official institutions—U.S. residents also raised their investments in long-term foreign securities, with net purchases of USD 21.4 billion.

Bonds Commentary:  The U.S. 10-year Treasury yield rose to about 4.14% on Friday, rebounding from a brief dip as investors weighed the Federal Reserve’s policy outlook. Softer inflation and a cooling labor market have strengthened expectations for rate cuts in 2026, though policy is widely expected to remain unchanged in January, with markets focusing on potential cuts from March onward.

Dollar Commentary:  The dollar index held near 98.5 on Friday and was set to end the week little changed, as investors assessed softer U.S. inflation and cooling labor market data that support the case for Fed rate cuts next year. While policy is expected to remain on hold in January, expectations for easing in 2026 persist, alongside added uncertainty from President Trump’s comments about appointing a new Fed chair inclined toward significant rate cuts.

Futures Update

U.S. stock futures were slightly higher on Friday, extending gains from the prior session after softer-than-expected inflation data boosted expectations of future Federal Reserve rate cuts. However, gains were capped by weakness in Nike shares. Despite Thursday’s rebound, which ended four consecutive losing sessions, major Wall Street indices remain on track for weekly declines. The S&P 500, Dow Jones Industrial Average, and NASDAQ Composite are each down around 0.8% for the week, reflecting lingering caution among investors.

Stocks moved slightly higher during Thursday's trading, largely reversing the decline from the previous session. All major averages showed strong upward momentum, with the NASDAQ leading the charge. The S&P 500 increased by 53.33 points, or 0.79%, to close at 6,774.75. From a technical standpoint, the index found support at important levels and steadily climbed, suggesting the possibility of a further upward trend in the near term. The 14-day Relative Strength Index (RSI) has bounced back from lower levels and could rise above the midpoint. Key support is positioned around 6,655, with resistance anticipated near 6,840.