US Stock Markets: Tech Earnings Fuel Friday Rebound
US equity futures are showing strong gains this morning, rebounding from Thursday’s sell-off as stellar earnings from tech giants Apple and Amazon reignited investor optimism. S&P 500 futures have advanced 0.6%, while Nasdaq 100 futures have surged 1.1%, signaling a positive open for Friday’s trading session. The Dow Jones futures are hovering around the flatline, reflecting the index’s lower exposure to the technology sector.
The recovery comes after a challenging Thursday session that saw the S&P 500 decline 1% and the Nasdaq Composite drop 1.6%. The previous session’s weakness was driven by concerns over ballooning AI infrastructure spending, with Meta suffering its steepest one-day decline in three years following investor pushback on capital expenditure plans.
Amazon’s Cloud Renaissance
Amazon has emerged as the star performer in after-hours trading, surging more than 13% following third-quarter results that easily topped Wall Street forecasts. The e-commerce and cloud computing giant reported its fastest growth in Amazon Web Services (AWS) in nearly three years, with the cloud division posting a robust 20% revenue jump. This acceleration signals renewed strength in enterprise demand and validates the company’s significant investments in cloud infrastructure and AI capabilities.
Apple’s Holiday Optimism
Apple shares rose as much as 3% in extended trading after the iPhone maker beat revenue estimates and provided upbeat guidance for the critical December quarter. The company’s bullish holiday forecast suggests strong consumer demand heading into the year-end shopping season, providing a positive signal for the broader consumer technology sector.
Netflix Adds to Positive Sentiment
Netflix contributed to the wave of optimism by unveiling plans for a 10-for-1 stock split, with shares rising over 3% in after-hours trading. The move makes shares more accessible to retail investors and reflects management’s confidence in the streaming giant’s long-term prospects.
UK Markets: FTSE 100 Expected to Dip After Nine-Session Rally
The UK’s FTSE 100 is expected to open 0.3% lower on Friday, according to IG Group, as investors pause after an impressive nine-session winning streak. The index closed at 9,760.06 on Thursday, up a modest 0.04%, managing to extend its rally despite headwinds from commodities-related stocks and fresh troubles at advertising giant WPP.
Sector Performance and Concerns
WPP shares slumped following a profit warning, weighing on the broader index. Commodities-related stocks have also been under pressure, reflecting ongoing concerns about global demand. Cyclical sectors such as Autos and Banks have shown particular weakness in recent sessions.
Despite these challenges, the FTSE 100 has demonstrated resilience, with Wednesday’s session seeing strong gains from NEXT (+8.39%), GlaxoSmithKline (+6.39%), and Glencore (+6.13%). However, worries over higher taxes continue to weigh on both the pound and gilts, as investors assess the fiscal policy outlook under Finance Minister Rachel Reeves.
European Market Outlook
Broader European markets are also expected to open lower, with Germany’s DAX and Italy’s FTSE MIB both forecast to decline around 0.2%. The European Central Bank’s recent rate decision continues to influence sentiment across the region.
Forex Markets: Dollar Strength Dominates Currency Trading
The US dollar is showing renewed strength across major currency pairs, approaching a key breakout zone as the DXY index eyes a move above critical resistance levels. The greenback is on track to rise for a second consecutive month, forming a potential morning star reversal pattern on the technical charts.
EUR/USD Under Pressure
The EUR/USD pair is testing key support levels and is on the cusp of challenging the October low at 1.1542. A break below 1.1528 would confirm a bearish breakout and could open the door to further downside. The pair has been range-bound between 1.1550 and 1.17, showing renewed bearish momentum after failing to hold above 1.1600. The euro remains pressured by a stronger US dollar and a cautious Federal Reserve outlook.
GBP/USD Weakness Persists
Sterling continues to struggle, with GBP/USD breaching the August low before failing to follow through. While a minor bounce may occur in the near term, an eventual downside break remains plausible. The pair is staying weak below its 200-day exponential moving average, with the 1.30 handle coming into focus for pound bears. UK tax concerns and fiscal policy uncertainty continue to weigh on the currency.
USD/JPY Rallies After BOJ Holds Steady
The USD/JPY pair has surged to an eight-month high following the Bank of Japan’s decision to hold policy steady. The BOJ refrained from committing to an imminent rate hike at its recent meeting, disappointing yen bulls. The pair has stalled above 154.00 as Tokyo inflation data comes in hotter than expected, but the overall trend remains supportive of further dollar strength against the yen.
Key Market Drivers and What to Watch
Federal Reserve Policy Outlook
The Federal Reserve remains a central focus for currency markets. Fed Chair Jerome Powell pushed back against market expectations for a 25 basis point rate cut in December at this week’s FOMC meeting, catching many by surprise. Prior to the meeting, fed funds futures were implying around a 90% chance of a Christmas cut. The Fed’s resistance to December cut expectations and crucial ISM data due next week will be pivotal for both Fed policy trajectory and the dollar’s direction.
US-China Trade Relations
In a significant development for international trade, President Trump and Chinese President Xi Jinping agreed to a one-year trade truce following talks in South Korea. The deal includes a 10% tariff reduction on Chinese goods tied to fentanyl and a pause on China’s rare-earth export restrictions. While this easing of tensions should provide support for risk assets, the one-year timeframe suggests this is merely a pause rather than a permanent resolution, with both sides likely using the time to reduce strategic dependence on each other.
Gold Maintains Safe-Haven Bid
Gold is holding above $4,000 per ounce, consolidating gains from Thursday’s 2.4% rally that halted a four-day losing streak. The precious metal’s resilience reflects ongoing concerns about long-term US-China competition despite the temporary trade truce. The détente has underscored the rise in China’s economic clout since Trump’s first term, fueling long-term unease and renewing interest in safe-haven assets.
Volatility Remains Subdued
The VIX volatility index is trading at 16.91, down 0.06%, indicating relatively calm market conditions despite the recent turbulence in tech stocks. This low reading suggests investors are not pricing in significant near-term market stress.
Trading Strategies for Today
Stock Market Approach
For equity traders, the focus should be on tech stocks following the strong earnings from Amazon and Apple. Look for continuation of the rebound in cloud computing and enterprise software names, particularly those with exposure to AI infrastructure. However, maintain caution around Meta and other stocks that have faced investor pushback on capital expenditure plans.
Entry points for long positions in S&P 500 futures could be considered on any pullback toward the 6,850 level, with stops below 6,820. Target the 6,920-6,950 zone for profit-taking. For Nasdaq 100 futures, consider long positions above 26,100 with stops below 26,000, targeting 26,300-26,400.
Forex Trading Opportunities
The US dollar’s strength presents opportunities across multiple currency pairs. For EUR/USD, consider short positions below 1.1540 with stops above 1.1570, targeting 1.1480-1.1450. For GBP/USD, shorts below 1.3050 could target the 1.30 psychological level, with stops above 1.3100.
USD/JPY longs above 154.50 could target 155.50-156.00, though be mindful of potential intervention rhetoric from Japanese officials. Use stops below 153.80 to manage risk.
Risk Management
Given the upcoming ISM data next week and ongoing Fed speaker appearances on Friday, maintain disciplined position sizing and be prepared for increased volatility. Avoid overextending on any single position, and consider taking partial profits at key technical levels to lock in gains while maintaining exposure to trending moves.
The market remains sensitive to both economic data and central bank commentary, so stay nimble and be prepared to adjust positions as new information emerges. Today’s session could see consolidation ahead of next week’s crucial data releases, so patience may be rewarded for those waiting for clearer directional signals.
