General Market Analysis – 25/10/24

Tech Stocks Surge Higher – Nasdaq Up 0.75%

US tech stocks rallied yesterday, with Tesla leading the charge, soaring 22% after an impressive earnings report. The Nasdaq ended the day up 0.76%, while the S&P 500 trailed behind with a modest gain of 0.21%. In contrast, the Dow Jones fell 0.33%. US Treasury yields retreated from recent multi-month highs, with the 2-year yield dropping 1.6 basis points to 4.071% and the 10-year yield falling 4.2 basis points to 4.199%. The US dollar also weakened, with the DXY falling 0.39% to close at 104.02. Oil prices declined amid news of potential ceasefire talks, with Brent down 0.56% to $74.54 and WTI falling 0.82% to $70.19. Gold rose in line with the weaker dollar, gaining 0.71%, closing the New York session at $2,748.90, edging closer to record levels.

Oil Prices Remain Volatile in an Uncertain World

Oil prices have experienced significant volatility in recent months, with traders anticipating more of the same as the year progresses. Price movements have been heavily influenced by updates on the ongoing Middle East conflict and its impact on supply from the region. Yesterday’s trading session was no exception, as renewed ceasefire discussions led to a pullback following a recent rally. Additional geopolitical factors are influencing the market, including the upcoming US election, with many traders now pricing in a negative impact on ‘Black Gold’ if Trump appears likely to win. Support for WTI is currently around $68 per barrel, with resistance near $78, though some market participants believe these ranges could be broken sooner rather than later, especially if one of the aforementioned geopolitical issues escalates.

Another Busy Trading Day to Close Out the Week

Traders are anticipating another active trading day to end the week, with a relatively light calendar set to combine with ongoing geopolitical developments. The Asian session will initially focus on Japanese markets, with Tokyo CPI data due for release early in the day. In the European session, the German IFO Business Climate numbers are expected, although their impact has diminished in recent years, Euro traders will still be attentive to any surprises away from the expected print of 85.6. The US session is expected to remain lively, with attention turning to Canada as retail sales data is released, following the Bank of Canada’s recent rate cut. Additionally, secondary US data, including Durable Goods numbers and revised University of Michigan figures, will add to the day’s trading activity.

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