The US stock market ended the week positively, driven by strong performances in the technology sector, particularly following Netflix's impressive earnings report.
The S&P 500 recorded a weekly gain of 0.85%, while the Dow Jones Industrial Average increased by 0.96%. The Nasdaq 100 index also rose by 0.26%. This marks the sixth consecutive week of gains for all three major indices, representing their best performance since the end of 2023.
Netflix's stock surged by 11% after reporting strong third-quarter earnings, revenue, and subscriber growth. Apple shares also increased by 1.2% due to higher iPhone sales in China. These developments in the tech sector have significantly contributed to the overall market rally, highlighting its resilience and growth potential.
Last week's economic data exceeded expectations and boosted market sentiment. Better-than-expected retail sales and initial jobless claims provided a positive outlook. This week's economic calendar appears quieter, with key highlights including durable goods orders and the S&P's Global US Composite Purchasing Managers' Index (PMI), which is expected to remain steady at 54. Positive economic indicators have played a crucial role in shaping investor confidence and driving market activity.
In the political arena, Vice President Kamala Harris maintains a narrow lead in national polling, but the US Electoral College system means the election outcome will ultimately be determined at the state level. Former President Donald Trump is currently leading in six key battleground states, which has sparked gains across various asset classes, including the US dollar, yields, equities, and Bitcoin. These political developments have influenced market sentiment and investment strategies.
From a technical perspective, the Nasdaq 100 index is currently positioned above short-term support levels at 20,000, with a more significant support layer at 19,600/19,500. Analysts anticipate that if the index can maintain its position above these support levels, it may test and potentially break the mid-July high of 20,690, with an eye towards reaching 21,500. However, a sustained break below the 20,000 support could signal a deeper decline, with initial support levels identified at 18,655, followed by the September low of 18,400 and uptrend support at 18,100.
Similarly, the S&P 500's technical outlook remains unchanged, with the index expected to continue its upward trajectory as long as it stays above the horizontal support band at 5760/5750. Should the S&P 500 maintain this support, analysts project a potential rise towards 5900 and possibly 6000. Conversely, a sustained break below the 5670/5650 support levels, particularly in the context of bearish relative strength index (RSI) divergence, could indicate a deeper market correction, with significant support levels at 5402 and 5306.
As the market continues to navigate these technical levels, traders are advised to remain vigilant and responsive to shifts in both economic data and political developments, which could significantly influence market dynamics in the coming weeks.