Risk-Off Sentiment Deepens Ahead of Key Economic Data and Nvidia Earnings

Index Update : U.S. stock futures trimmed earlier losses but stayed about 0.3% lower on Tuesday, keeping the S&P 500 and Dow on course for a fourth straight decline. Sentiment remained cautious amid valuation worries in AI and tech stocks ahead of Nvidia’s earnings, with the stock down 1% premarket. Investors are also focused on the return of key economic data releases, including Thursday’s jobs report, which could influence Fed rate-cut expectations. Initial jobless claims rose to 232K and continuing claims hit their highest level since August. Home Depot slipped 1.7% after cutting its full-year profit outlook and missing earnings estimates.

Market Movers :  On Monday, the top gainers were Alpha Technology Group Limited (+139.84%), followed by Safe & Green Holdings Corp. (+49.77%). On the contrary OneConstruction Group Limited (-57.59%), and Cycurion, Inc. (-28.64%) declined the most the same day.

Commodities Update : WTI and Brent crude prices extended losses on Tuesday, sliding to $59.5 and $63.7 per barrel respectively, as growing concerns over a global supply glut overshadowed upcoming U.S. sanctions on Russian oil. Markets remain bearish amid rising output from OPEC and non-OPEC producers, slowing demand, and the resumption of loadings at Russia’s Novorossiysk port. Although sanctions on Rosneft and Lukoil have prompted major buyers to seek alternative supplies, other geopolitical risks—such as disruptions in Sudan, tanker seizures by Iran, and potential U.S. action in Venezuela—could lend some support to prices.

Gold also fell, trading near $4,030 per ounce for a fourth straight session of declines, as fading expectations of a near-term U.S. rate cut weigh on sentiment. With delayed economic data and recent hawkish Fed comments reducing hopes for a December cut, investors are awaiting key releases this week, including September jobs data and the Fed’s meeting minutes. Market odds of a December 25bps cut have dropped to 46%, from over 60% last week.

Macro Updates

Dollar Holds Steady Amid Caution Ahead of Key U.S. Data Releases

The dollar index held steady near 99.5 on Tuesday, pausing after recent gains as traders stayed cautious ahead of key U.S. data releases. Jobless claims rose to 232K, with continuing claims hitting their highest level since August, while delayed government data—including Thursday’s jobs report—resumed. Concerns persist that upcoming figures may reduce the Fed’s room to cut rates, with markets pricing in a 46% chance of a 25 bps cut next month. The dollar was broadly stable, edging higher mainly against the Swiss franc and yen.

U.S. Continuing Jobless Claims Reach Highest Level Since August

Continuing jobless claims climbed to 1.957 million for the week ended October 18, 2025, marking the highest level since early August. This compares with 1.947 million in the previous week, based on updated Department of Labor data. Regular weekly claims reports have been delayed due to the federal government shutdown.

U.S. Jobless Claims Data Distorted by Shutdown, Highlighting Rising Labor Market Strain

The four-week moving average of U.S. jobless claims plunged to an artificially low 58,000 for the week ending October 18, 2025, skewed by missing data during the extended government shutdown. With three weeks of unreported claims counted as zeros, only the latest 232,000 initial claims were included, compared with a prior fully reported average of 237,750. Initial claims for the week came in at 232,000, remaining above recent post–Q2 trends. Meanwhile, continuing claims reached 1.957 million on a non-seasonally adjusted basis, near their highest levels since 2021 and consistent with broader signs of softening U.S. hiring momentum.

Bonds Commentary : U.S. 10-year Treasury yields fell toward 4.10% on Tuesday as traders awaited delayed economic data, including this week’s key jobs report, to gauge post-shutdown economic conditions and the Fed’s policy path. Fed officials have recently signaled caution about a December rate cut, with Governor Waller still supportive of easing while Vice Chair Jefferson urged a slower approach. Market odds of a 25bps cut in December have slipped to about 46%, down from over 60% last week.

Futures Update : U.S. stock futures were lower early Tuesday, signaling further weakness after Monday’s sharp selloff. Dow futures slipped 0.3%, S&P 500 futures 0.4%, and Nasdaq 100 futures 0.5%. All major U.S. indexes closed below their 50-day moving averages, with losses accelerating late in the session. Tech stocks led the decline, as Nvidia dropped 1.9% ahead of its earnings, pressuring peers like AMD and Super Micro Computer.

After initially lacking clear direction early in the session, the stock declined sharply throughout Monday's trading day. The S&P 500 dropped by 61.68 points, or 0.92%, closing at 6,672.42. From a technical perspective, the index is breaking below a key support zone, with multiple closes below the 21-period EMA, suggesting the potential for further downside in the near term. The 14-day Relative Strength Index (RSI) remains below the midpoint, indicating some downside movement. Key support levels are around 6,555, with resistance expected near 6,780.