Telecom lifts Nasdaq, Dow and S&P close with modest losses

Energy weighs on the S&P 500 on Thursday.
Telecommunication outperforms other major sectors.
Trade concerns continue to weigh on industrials.

Eren Sengezer FXStreet

Major equity indexes in the U.S. failed to determine a clear trend on Thursday as major sectors showed varying performances.

Crude oil prices failed to make a decisive recovery on Thursday even though the U.S. sanctions against Iran went into effect on Thursday and the S&P 500 Energy Index closed the day 0.9% lower. On the other hand, boosted by upbeat earnings from Motorola and T-mobile earlier this week, the S&P 500 Telecom Service Sector extended its upside and closed with a 1% gain.

Meanwhile, concerns over escalating trade conflict between the U.S. and China weighed on the trade-sensitive S&P 500 Industrials Index, which ended up losing 0.57% on the day.

"There is low volatility in the markets as the S&P and Nasdaq are just below all-time record highs, and it seems like markets are complacent right now. It's a risk-on trade. Investors are more comfortable with FAANG stocks and technology as far as valuations go, and these stocks have higher margins," Tom White, chief market strategist at TradeWise Advisors, in Chicago, Illinois, told Reuters.

The Dow Jones Industrial Average fell 69.30 points, or 0.27%, to 25,514.45, the S&P 500 erased 3.57 points, or 0.12%, to 2,854.13 and the Nasdaq Composite gained 5.03 points, or 0.06%, to 7,893.35.

DJIA Technical Outlook (via FXStreet Chief Analyst Valeria Bednarik)

"The Dow's positive momentum keeps fading according to technical readings in the daily chart, but by no means indicates an upcoming bearish continuation, as the index holds well above all of its moving averages, and with the 20 DMA maintaining its bullish stance. Technical indicators, however, retreat within positive territory, with the RSI pulling back from overbought readings."

"Shorter term, and according to the 4 hours chart, the index turned negative, as it closed below its 20 SMA, while technical indicators entered negative territory, maintaining their bearish slopes."

According to the analyst, supports could be seen at 25,491, 25,448, 25,40 while resistances align at 25,572, 25,648, and 25,690.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

AUD/USD consolidates above 0.7000; remains close to monthly top

AUD/USD holds steady above 0.7000 during the Asian session on Friday, trading just below the previous day's monthly low amid diverging forces. A hawkish RBA continues to support the Aussie, while the recent decline in US bond yields keeps the US Dollar depressed near a three-week low. However, oil-driven inflation fears reinforce Fed hike bets, which, along with geopolitical risks, could benefit the safe-haven buck and cap the currency pair.

USD/JPY bounces off one-month low; climbs to 157.00 amid reviving USD demand

USD/JPY rebounds from the 156.00 neighborhood, or a one-month low touched during Friday’s Asian session, with bulls looking to extend momentum beyond 157.00 amid the emergence of some US Dollar buying. Meanwhile, Japan's National CPI rose to a nine-month peak and reaffirmed BoJ rate-hike bets, which could support the Japanese Yen and cap gains for the currency pair.

Gold treads water around $4,000

Gold prices maintain its offered stance in place at the end of the week, hovering around the key $4,000 threshold per troy ounce. The persistent selling bias in the precious metal comes amid decent gains in the US Dollar and an acceptable rebound in US Treasury yields across the curve, all alongside further upside traction in crude oil prices.

Week ahead: Central bank and earnings bonanza could roil markets

After joining the rate-hike club in September, the Federal Reserve looks set to stand pat in October, waiting to assess more data before deciding to hike again. Whilst this isn’t an unusual move for a central bank, it somewhat contradicts Fed Chair Kevin Warsh’s new mantra of data dependency and zero forward guidance.

CFTC Report: WTI rally runs ahead of positioning

The week in one sentence: WTI prices surged while speculative longs were cut in the week to October 20, creating the clearest price/positioning divergence. Sterling and the Canadian Dollar led the constructive currency shift, while Yen longs also rebuilt. Speculators turned less constructive on the WTI, reducing their net exposure to around 89.3K contracts.

What November 3 means for the Fed's rate path and the US Dollar

The USD faces a decisive period ahead of the November 3 midterm elections. While markets anticipate another interest rate increase from the Fed in December, the battle for control of Congress could reshape fiscal policy expectations and, indirectly, the path of US monetary policy in 2027.