Stabilizing Futures, Mixed Earnings, and Shifting Macro Signals

Index Update:  U.S. stock futures turned higher on Wednesday, recovering from early losses as the S&P 500, Nasdaq 100, and Dow futures all edged up. Nvidia gained ahead of its highly anticipated earnings, while Lowe’s surged on strong results and Target slipped after weaker sales and a lowered outlook. Several major companies, including TJX, Palo Alto Networks, and Deere, are set to report later. Investors are also awaiting trade data and the FOMC minutes, with markets pricing roughly a 49% chance of a rate cut next month.

Market Movers:  On Tuesday, the top gainers were Olema Pharmaceuticals, Inc. (+136.38%), followed by Epsium Enterprise Limited (+91.55%). On the contrary SMX (Security Matters) Public Limited Company (-37.14%), and HCW Biologics Inc. (-21.24%) declined the most the same day.

Commodities Update:  WTI and Brent crude prices slipped on Wednesday as a larger-than-expected U.S. inventory build signaled rising supply, overshadowing concerns about upcoming U.S. sanctions on Russian oil majors. U.S. stockpiles rose for a third straight week, tanker volumes increased, and the IEA warned of a potential surplus next year, prompting worries about oversupply despite some Asian buyers pausing Russian purchases. Gold held firm above $4,100 as investors sought safety ahead of the Fed’s meeting minutes and the delayed U.S. jobs report. With expectations for a near-term rate cut easing and equity sentiment pressured by stretched tech valuations, demand for gold remained supported.

Macro Updates:  U.S. mortgage applications fell 5.2% in mid-November, the sharpest drop since September, as rising mortgage rates and renewed inflation concerns dampened demand. Refinance applications slid 7.3%, while purchase applications declined 2.3%. The average 30-year fixed mortgage rate inched up to 6.37%, its third straight weekly increase and the highest in a month, though still below year-ago levels.

Bonds Commentary:  The 10-year U.S. Treasury yield held above 4.1% on Wednesday, supported by persistent inflation concerns and reduced expectations for near-term Fed rate cuts. Fresh unemployment claims showed labor market stability, easing fears of a sharper slowdown. Rate futures now lean slightly toward the Fed holding rates next month, reversing last week’s expectations for a 25 bps cut. Investors are awaiting FOMC minutes for insight into growing divisions among policymakers on the appropriate path for monetary policy.

Futures Update:  U.S. stock futures inched higher on Wednesday, offering some stability after several days of declines as investors waited for Nvidia’s earnings and the Fed’s October meeting minutes. Dow, S&P 500 and Nasdaq futures were modestly higher. This follows a weak session on Tuesday, when major indexes extended their multi-day slide amid worries over heavy AI-related spending and stretched tech valuations, with the S&P 500, Dow, and Nasdaq all posting notable losses.

S&P 500 Technical Summary

The S&P 500 has displayed a significant shift in technical sentiment, signaling that bears have taken control from the bulls. For the first time since May 12, 2025, the index charted below its 50-Day Exponential Moving Average (50-D EMA), confirming a breakdown of the recent short-term trend.  This downside momentum is further validated by the 14-Day Relative Strength Index (RSI) dropping below the 40 level. This is the first such instance since April 22, 2025, strongly indicating increasing selling pressure.  The index now have next immediate support at the 6500 level, which converges with the 100-Day EMA. However, the crucial support is identified at 6250. Based on these levels, the S&P 500 could experience a further decline of 1% to 5% from its current trading price. The breach of the 50-D EMA and the drop in the RSI below 40 are key indicators  should monitor.