- US Markets
SPX is steady this morning after Wednesday’s gains, trading near $6,850, as softer ADP job numbers strengthened expectations for a December Fed rate cut and reinforced the view that monetary easing is now virtually certain.
Yesterday’s buying was driven largely by mid-caps and small caps, with the Russell 2000 jumping 1.9% and outperforming the Magnificent 7, which saw broad weakness as investors rotated out of AI-heavy megacaps. Microsoft, Nvidia, Apple and Micron all closed lower, reflecting investor appetite to take profits in AI names and reposition into consumption- and construction-linked sectors.The Dollar Index recorded its greatest fall of the past few months with bets on rate cuts overwhelming and speculation on the next chair of the Federal Reserve increasing, which only amplified equity sentiment. Salesforce delivered strong after-hours results, adding a positive fundamental layer to the tape. However, the rotation out of tech continues to weigh on overall market breadth as the AI trade remains unsteady, dragging tech to the bottom of sector performance. The market is now pricing an 89% chance of a Fed cut next Wednesday, far higher than expectations just two weeks ago.This macro environment remains at ease with mid-caps and cyclicals, especially with investors re-evaluating the earnings trajectory into 2026. Tariff headlines will also be monitored by traders since Treasury Secretary Scott Bessent commented that US-China agreement is been honoured by China. As we head into the FOMC meeting next week, markets will increasingly try to discount a more dovish FOMC with the likely appointment of the incumbent NEC Director Kevin Hasset (considered to be dovish) as the next Fed Chair.
Options positioning continues to suppress volatility, with heavy dealer gamma concentrated near the $6,800 – $6,850 zone on the SPX,which is limiting intraday swings. A drop below $6,775 could unwind supportive hedging flows and open downside toward $6,700. Technically, the S&P 500 remains in a constructive posture trading near $6,850, a level which the index is trying to break since past week. Support is seen at the 9 SMA at $6,811 and the 21-day SMA at $6,757, with immediate resistance at $6,882 and the all-time high of $6,913
- U.S. Dollar Index
The U.S. Dollar Index continued its slide on Wednesday, falling 0.46% as growing evidence of labor market softness strengthened expectations for a Federal Reserve rate cut next week. At present, DXY is trading at $98.99, up 0.13% having a modest bounce, though overall sentiment remains decisively bearish.
The latest blow came from ADP data, which reported a 32,000 drop in private payrolls, signaling a deeper slowdown in U.S. employment conditions. The softer data has strengthened the dovish outlook for the Fed that continues to weigh on the greenback. Meanwhile, the euro gained 0.40% against the dollar in the previous session, supported by upbeat Eurozone business activity. The HCOB Eurozone Composite PMI rose to 52.8 in November from 52.5, marking its sixth consecutive monthly increase, further pressuring the DXY. Today’s focus turns to U.S. Initial Jobless Claims, where any further labor market weakness could accelerate the bearish trend in the dollar ahead of the Fed’s policy decision.
On the technical side, the DXY is trading below its 9- and 50 Day SMAs of $99.45 and $99.12 respectively. Significant resistance lies at $99.24 level, which falls on the descending trendline, followed by $99.40 level (horizontal base resistance). Immediate support lies at the 100 Day SMA at $98.57 level, followed by the $98.03 level (17th October low). The EURUSD is trading at 1.1661; immediate support is at the 50 Day SMA at 1.1611 and resistance at 1.1726.
- Crude Oil
WTI crude oil rose by 0.85% in yesterday’s session, settling near $59.16, and is currently trading around $59.30, up 0.30% in early Asian hours today as geopolitical tensions persist.
Prices continued to find support from API’s crude inventory report, as the reading reported a fall in crude oil inventory by 2.48 million barrels as compared to the fall of 1.90 million barrels previously. The EIA crude oil inventory report supported the API report, as the increase in crude oil stocks of 574,000 barrels was significantly less than the previous reading of 2.77 million barrels. The US administration’s proposed rollback of its fuel-economy standards also suggests a longer-term policy shift that could lift domestic fossil-fuel demand, supporting prices.
Geopolitical risks are adding a further layer of support as Ukrainian attacks on the Druzhba oil pipeline in Russia’s central Tambov region signalled potential supply constraints, and stalled peace talks tempered expectations of a deal restoring Russian oil flows to global markets.
From a technical perspective, WTI holds above the 9-day and 20-day SMAs. Resistance lies at $59.96, on the descending trendline formed by joining the highs of Oct 27, Nov 18, Nov 19, and Dec 1. The 50 SMA level of $60.04 coincides with the descending trendline acting as a key test for the bulls. A break above this level can result in short-term bullishness. Support can be seen at the 20-day SMA of $59.20. For Brent, resistance lies at $63.55, a previously tested level, and support is seen at yesterday’s low $62.18.
- Gold and Silver
Gold fell by 0.13% in yesterday’s session. The metal has been range-bound since Oct 28, as investors await critical economic data to assess the health of the economy.
On a fundamental level, investors have been cautious as new economic data is being released. The U.S. private payrolls shrank by 32,000 in November. This is the lowest in 2.5 years. The dataset clearly indicates a weakening of the labour market. According to CME Fedwatch, the rate cut expectations now stand at 89.2%. Today, the markets eagerly await the PCE data. This dataset is a key metric used by the Fed to assess inflation. Hotter-than-expected inflation can dim expectations for a rate cut, leading to further volatility. Lower interest rates and a weaker dollar result favorably for gold.
On a technical level, we remain bullish on gold. Gold is range-bound between $4136 and $4236. As of now, gold is seeking support at the lower range, which acts as a strong support. The support coincides with the 9-day SMA. Gold can bounce back to its upper resistance at $4236, which will account for 1.3% up move. A break above this resistance can lead gold to meet its next resistance at $4300. On the downside, the next support is at $4100, which coincides with the 100-day SMA. Gold is trading above its 9,21,50,100 and 200 SMA, indicating further bullish momentum.
Silver has been rising for 7 consecutive sessions; however, momentum faded yesterday, with silver closing almost flat, up by 0.04%. Silver too seems to be range-bound between $56.68 and $58.90. A break above the $58.90 level can push silver to its next resistance at $60. Silver’s daily RSI is in overbought territory and is gradually pulling back toward 70, keeping investors cautious ahead of today’s economic data.
