U.S. Markets Slide Amid Earnings Pressure, Fed Uncertainty, and Weakening Risk Sentiment

Index Update:  U.S. futures fell sharply on Tuesday, with the S&P 500 down 1.1%, Nasdaq 100 dropping 1.4%, and Dow Jones losing over 400 points. The pullback followed a mixed session as the AI-driven rally faded and investors digested new earnings. Caution deepened after top Wall Street CEOs warned of a possible market correction, while traders adjusted December Fed rate-cut expectations amid mixed signals. Palantir plunged nearly 8% on valuation concerns despite strong results, Vertex fell 3.8% on mixed earnings, and Nvidia slipped over 2%, reversing Monday’s gains.

Market Movers:  On Monday, the top gainers were Prelude Therapeutics Incorporated (+150.31%), followed by Terns Pharmaceuticals, Inc. (+69.85%). On the contrary uniQure N.V. (-49.34%), and NOMADAR Corp. (-45.24%) declined the most the same day.

Commodities Update:  Oil and gold prices declined on Tuesday as market sentiment weakened. WTI crude fell over 1% to $60.1 per barrel and Brent dropped to $64.1, ending a four-day rally amid oversupply concerns despite OPEC+ pausing output hikes early next year. Analysts warned of potential surplus risks in 2026, though geopolitical tensions and tighter U.S. sanctions on Russian oil majors could constrain supply. Meanwhile, gold slipped below $4,000 per ounce as fading expectations of further U.S. rate cuts and easing safe-haven demand pressured prices. Several Fed officials signaled caution on additional easing, while improved U.S.-China trade relations and China’s withdrawal of a gold tax incentive further dampened global demand.

Macro Updates:  The U.S. Logistics Manager’s Index (LMI) held steady at 57.4 in October 2025, signaling continued growth in the logistics sector. Declines in inventory levels and warehousing utilization were offset by stronger transportation activity. Transportation prices and utilization both rose, while available capacity expanded at a slower pace, ending a two-month freight inversion trend. The data suggests inventories are falling ahead of the holiday season, easing warehouse pressure and boosting goods movement.

Bonds Commentary:  The U.S. 10-year Treasury yield fell to 4.08% on Tuesday, easing from recent highs after the Treasury lowered its Q4 borrowing estimate to $569 billion, $21 billion less than previously expected. The decline also reflected mixed signals from Federal Reserve officials, prompting traders to adjust rate-cut expectations. Markets now see about a 70% chance of a 25 bps rate cut in December, down from 90% last week but up from 60% earlier this week.

Futures Update:  U.S. stock futures fell sharply on Tuesday as investors grew concerned about the economy and assessed more corporate earnings. Dow futures were down 0.7%, S&P 500 futures dropped 1%, and Nasdaq 100 futures slid 1.3%. This followed a mixed close on Monday, with the Dow declining while the S&P 500 and Nasdaq posted gains.

Powered By : tradingview.com, Analysis by Kalkine Consultancy

The S&P 500 (SPX) daily chart shows a strong, established uptrend since the March/April lows, confirmed by the price trading significantly above all major Exponential Moving Averages (EMAs), which are bullishly aligned. This suggests powerful momentum.

However, the rally is approaching a crucial point near the all-time high of 6,831.98. A key warning sign is a potential negative divergence on the Relative Strength Index (RSI), which is currently at 62.38. While still bullish, the lower RSI peak compared to the recent price high indicates that momentum may be waning.

Outlook: Bulls need a decisive breakout above 6,831.98 to confirm continuation. A failure to break higher, coupled with a drop below the nearest EMA support (around 6,547), would confirm the momentum exhaustion and likely trigger a near-term correction towards the Fibonacci/EMA support levels around the 6,000 - 6,200 zone. The overall bias remains bullish but with immediate caution at resistance.