On Thursday, the S&P 500 dropped 4.84% to 7,330, with about $3 trillion wiped off S&P 500 companies. The Nasdaq 100 sank 6.96% to 26,526, more than erasing Wednesday’s post-election rally. Nvidia fell more than 9%, while the Philadelphia Semiconductor Index plunged more than 12%. Today, U.S. stocks edged slightly higher, with the Nasdaq up 0.16% and the SPX up 0.13% as investors await the October jobs report.
Attention now turns to today’s October jobs report. Nonfarm payrolls are expected to rise by 65,000 after 29,000 in September. Markets have been quickly pricing out Fed rate hikes. However, with inflation still elevated, equity weakness alone may not be enough to prompt a dovish shift, particularly if oil prices recover.
The S&P 500 confirmed a breakdown after Thursday’s selloff broke every support level of the past three weeks. The failed rally to 7,700 on November 4 was followed by a full reversal, a classic bull trap, and the index is now consolidating just above its lows. Immediate support lies at 7,290, Thursday’s low, followed by 7,240 and 7,162. Resistance stands at 7,427, then the psychological level of 7,500.
The Nasdaq 100 remains weaker. Support lies at 26,500, and a break would target 26,000. Resistance stands at the 9-period SMA on the 4-hour chart at 27,365, followed by 27,750.
Gold and Silver
Gold surged to a high of $4,146.99 yesterday, before tempering some of those gains to close the session higher by 0.64% at $4,087.15. Democrats winning both the House of Representatives and Senate in the mid-term elections caused investors to temper expectations of tax cuts and fiscal expansion, thereby sending treasury yields and the dollar lower. This lent a significant leg up to gold over the previous two sessions. Nonetheless, gold is down 0.90% for the day at $4,050 as the U.S. Dollar index climbed 0.34% today and inflation concerns came back in focus. Friday’s NFP data will be closely scrutinized by traders as it will shape the Fed’s next move, with markets already anticipating a rate hike at the December FOMC meeting. Gold has immediate support around $4,026, which roughly aligns with the 200-EMA support on the 1-hour chart. As long as gold remains above the psychologically significant $4,000 level, it could potentially attract dip buying. The immediate resistance lies around $4,102, with yesterday’s intraday high of $4,146.99 posing the next potential target if the first level clears.
Silver fell 0.92% yesterday and is down 0.90% at $51.34 today. So far, the key support level of $48.42, which roughly aligned with the 2011 highs, has held well. On the 4-hour chart, recent trend-based Fibonacci retracements indicate the presence of strong support around $50.78. This level could likely attract buyers, especially with the 5-period RSI on the 4-hour chart at 30.55. However, a break below could take silver to $48.93. Silver’s outlook remains mixed, as expectations of tighter monetary policy could weigh on its recent recovery, although persistent supply deficits continue to offer support. The Silver Institute expects the market to face a 46.3-million-ounce deficit in 2026, marking the sixth consecutive year of shortages and taking cumulative inventory depletion since 2021 to 762 million ounces. On the demand side, renewed investor interest is expected to drive an 18% increase in physical bar and coin purchases, partly offsetting a projected 3% decline in industrial consumption.
Crude Oil
Oil rebounded almost 3% in yesterday’s session as renewed tanker attacks in the Gulf and Strait of Hormuz revived concerns about potential supply disruptions and supported a modest recovery. Oil remains marginally higher in today’s session, although the broader technical and fundamental outlook remains bearish. On the fundamental front, combined crude exports from Saudi Arabia, the United Arab Emirates, Iraq, and Kuwait climbed by 10% to top 15 million barrels a day. Saudi Aramco has ramped up production and shipments from key terminals like Ras Tanura and Yanbu. The nearest time spread for the regional Dubai benchmark was in a bearish contango structure at the start of the week. The November contract was last at a discount of about $2 per barrel to December. In simple terms, the November contract was trading at a discount to December, indicating relief in short-term supply.
Technically, WTI is trading at $92.03 and has broken below the ascending parallel channel on the daily timeframe. The channel connects the lows at $67.95, $80.29, and $90.42 with the highs at $94.49 and $106.96. In this scenario, every rise presents a selling opportunity. On the shorter hourly timeframe, after yesterday’s rebound, the 5-period RSI is trending down from overbought levels today. Price is currently facing resistance at the 50% Fibonacci retracement level of $92.32, drawn from the high of $97.76 to the low of $87.43. A rejection at this level could pave the way for a retest of $87.43. Conversely, the bearish trend would be invalidated if price closes above $96.97 on the daily timeframe, effectively recapturing the lower trendline of the parallel channel.
Brent is trading at $102.85 and has also broken below the 50-day SMA on the daily timeframe. It rebounded in a relief rally during yesterday’s session. However, given the trend, each rise is a selling opportunity. On the shorter hourly timeframe, after yesterday’s rebound, the 5-period RSI is trending lower from overbought levels. Price is meeting resistance at the 61.8% fib retracement level drawn from the highs of $108.38 to the lows of $96.84. If the trend continues, price could test the $96.84 level again. Conversely, the bearish trend would be invalidated if price closes above $106.10 on the daily timeframe.
U.S. Dollar Index
The U.S. Dollar Index is staging a recovery towards 101.94 during Friday’s Asian session, supported by a rotation away from risk assets towards safe havens, including US Treasuries, amid heightened market uncertainty. The greenback is caught between competing forces as US midterm election results continue to weigh on sentiment, while resilient economic data and geopolitical uncertainty offer some support. Concerns over tighter scrutiny of the AI sector triggered a sharp sell-off in US technology stocks yesterday, raising questions about the sustainability of AI-led investment and potentially weakening foreign demand for US assets.
Attention now turns to today’s October NFP report, with consensus expecting 65,000 new jobs compared with 29,000 in September, while unemployment is forecast to remain at 4.2%. Wage growth will also be closely monitored for clues on the Fed’s policy trajectory. A stronger-than-expected print, particularly with firm wage growth, would likely reinforce December rate-hike bets and push the index higher, while a weaker reading would strengthen the case for the Fed to hold rates, weighing on the dollar.
Resilient US labour-market indicators and geopolitical uncertainty could provide near-term support, keeping the intraday dollar bias cautiously bullish ahead of the NFP report. Technically, DXY is bullish above its 20-day SMA near 101.94. A sustained break above this level could open the way towards 102.10, while support is positioned at 101.45. Meanwhile, EUR/USD has a bearish intraday bias after slipping below its 20-day SMA, with resistance at 1.1230 and support near 1.1150.
