The US stock market ended the week positively, with the Dow Jones Industrial Average leading the way. Investors are focusing on cyclical stocks that are expected to benefit from a strong economy.
Despite some caution in the technology sector, the overall sentiment among investors is optimistic about economic recovery. Inflation concerns are still a topic of discussion.
President-elect Donald Trump's nomination of Scott Bessent as the new US Treasury Secretary is expected to influence fiscal policy and economic strategy. Investors are closely monitoring economic policy changes as they anticipate the release of the Federal Open Market Committee (FOMC) meeting minutes and the core personal consumption expenditures (PCE) price index.
The upcoming week is likely to be influenced by key economic indicators, with the core PCE inflation report being particularly significant. Analysts expect an increase in core PCE inflation for October, which could raise concerns about the Federal Reserve's ability to manage inflation. The market's reaction to these inflation figures will be closely watched as asset allocators and pension funds prepare for month-end rebalancing flows.
Technical analysis of major indices suggests that the Nasdaq 100 and the S&P 500 have shown signs of recovery, but a sustained break below certain support levels could indicate a deeper decline.
The interplay between economic indicators, corporate earnings, and investor sentiment will be crucial in shaping the trajectory of US equities in the coming weeks.