As we kick off the trading week on Monday, November 10, 2025, markets are showing signs of cautious optimism following a turbulent week marked by valuation concerns and the ongoing government shutdown saga. After Senate lawmakers took a critical step late Sunday toward ending the historic shutdown, futures are pointing higher, offering traders a potential reprieve from last week’s selloff.
Stock Market Outlook: Recovery or Dead Cat Bounce?
US stock futures opened the week on a positive note, with the S&P 500 futures gaining 0.76%, Dow futures adding 112 points (0.24%), and Nasdaq-100 futures surging 1.29%. This morning’s strength comes after a brutal week that saw the Nasdaq plunge 3% – its worst performance since the tariff-driven selloff in April. The S&P 500 shed 1.6% while the Dow dropped 1.2%.
The primary catalyst for today’s optimism is progress on ending the government shutdown, now entering its seventh week and officially the longest in US history. A bipartisan Senate deal advanced Sunday evening with the minimum 60 votes needed, after eight Democratic senators broke ranks with party leadership. The proposed agreement would reopen the government into January and reverse some recent mass federal layoffs, though it notably excludes an extension of ACA credits – a key Democratic priority.
However, traders should approach this rally with caution. The shutdown has driven consumer sentiment to its lowest level in more than three years, and the absence of critical economic data releases – including this week’s scheduled CPI and PPI reports – leaves markets flying blind on inflation trends. This data vacuum could amplify volatility as the Federal Reserve approaches its December policy meeting.
Last week’s correction was driven primarily by mounting concerns over excessive valuations in artificial intelligence-related stocks. High-flying names like Palantir, Microsoft, and Nvidia suffered sharp declines despite delivering robust earnings, suggesting the market has become hypersensitive to any disappointments. CNN’s Fear & Greed Index has plummeted to 21, indicating extreme fear – a level some contrarian investors view as a potential buying opportunity.
From a technical perspective, the Nasdaq 100’s failure to hold its 20-day moving average suggests further downside potential. A 50% Fibonacci retracement of the recent rally points to 24,635 as a near-term target, with critical support around the 23,000 level. A breakdown below that threshold would raise serious concerns about a broader bear market developing. For now, most analysts view the 5-10% pullback as a healthy correction after the relentless rally since April, but a decline extending beyond 15% would be alarming.
Key levels to watch today:
– S&P 500: Support at recent lows around 5,850; resistance at 5,950
– Nasdaq 100: Watch the 24,635 Fibonacci level; critical support at 23,000
– Dow Jones: Support at 43,500; resistance at 44,200
Forex Market Outlook: Dollar Weakness Creates Opportunities
The currency markets are showing interesting dynamics to start the week, with the Canadian dollar exhibiting exceptional strength following robust employment data, while the Japanese yen and New Zealand dollar are under pressure.
Currency strength hierarchy for today:
Strong: CAD (very strong), GBP (minor strength), AUD (minor strength)
Weak: JPY (weak), NZD (weak), USD (minor weakness)
The US Dollar Index is showing signs of fatigue after three consecutive weeks of gains, retreating after briefly breaching the psychologically important 100 level. Market pricing for a December Federal Reserve rate cut has been fluctuating between 60-70% probability, as Fed governors remain divided between those emphasizing inflation risks and others concerned about labor market deceleration.
EUR/USD is demonstrating technical recovery signals after finding support at the 200-day moving average around 1.1468. The pair has depreciated roughly 4% since peaking at 1.1918 in September, but the MACD indicator is approaching a positive crossover. Recovery momentum sustainability depends on EUR/USD’s ability to overcome resistance at the 20-day MA around 1.16. A breakthrough could suggest further upside potential toward 1.18, while failure to hold current levels could trigger a deeper downtrend if the pair breaches August’s low at 1.1391.
GBP/USD is trading around 1.3161 after the Bank of England delivered a dovish hold last week via a 5-4 vote, signaling gradual easing ahead if disinflation continues. This week’s UK data will be crucial – Tuesday brings the unemployment rate (consensus 4.9% vs 4.8% prior) and Thursday features Q3 GDP (consensus 0.2% vs 0.3% prior). Weakness in these figures could reinforce December rate cut expectations and pressure sterling lower.
The European Central Bank, in contrast, has expressed satisfaction with current monetary conditions, noting that inflation has stabilized around the 2% target while economic downside risks have diminished. This divergence in central bank positioning suggests rate cuts are unlikely in the euro area near-term, potentially supporting EUR strength.
Trading opportunities for today:
Buy setups: EUR/JPY, GBP/JPY, AUD/NZD, CAD/JPY, CHF/JPY
– Rationale: JPY weakness combined with strength in CAD, GBP, and minor strength in AUD creates favorable risk-reward
Sell setups: EUR/CAD, AUD/CAD, USD/CAD, USD/MXN, NZD/CAD
– Rationale: CAD strength following employment data makes it attractive to sell weaker currencies against it
Note: Monday trading can be particularly challenging as the market digests weekend developments and establishes new weekly ranges. Exercise appropriate caution with position sizing.
Key Economic Data This Week
With the US government shutdown potentially ending, traders should monitor for the release of delayed economic reports including September and October non-farm payrolls, unemployment rates, and inflation data. The uncertainty around these releases adds an additional layer of complexity to trading decisions.
Confirmed international releases:
– Tuesday: UK unemployment rate, Australia consumer confidence
– Thursday: UK Q3 GDP, Australia unemployment rate
– Friday: China industrial production and retail sales
Risk Management Considerations
Given the elevated uncertainty from the government shutdown, missing economic data, and last week’s sharp correction, traders should consider reducing position sizes and widening stop losses. The potential for gap moves and increased volatility remains elevated. Focus on high-probability setups with clear technical levels rather than forcing trades in this environment.
Corporate earnings this week include Walt Disney on Thursday, along with AI infrastructure providers CoreWeave, Nebius, and Cisco. Chinese tech giants Tencent and JD.com also report Thursday, offering insights into consumer spending patterns.
The week ahead promises to be eventful as markets navigate the intersection of political developments, technical levels, and shifting central bank expectations. Stay nimble, manage risk carefully, and be prepared to adapt as new information emerges.
