Weekly Stock Market Update & SPY Technical Analysis
Markets reached a new milestone last week, with Dow Jones stocks leading the charge higher. Strong earnings from John Deere boosted farming and construction stocks to record levels, prompting bullish investors to shift capital into sectors that had lagged behind the tech-driven rally. This redistribution of capital is a positive sign for the bull market, as it allows overheated stocks to cool off and consolidate. Nvidia, one of those high-performing names, also reported earnings last week. Despite delivering stellar results, the stock remained flat, likely because the strong performance had already been priced in. With no unexpected surprises, Nvidia’s earnings failed to spark a significant reaction.
Now that Nvidia's earnings are behind us, tech-focused investors can breathe a sigh of relief. Attention shifts back to inflation data, with an important update coming this week via the PCE index. Year-over-year inflation is expected to tick up from 2.1% to 2.3%, marking the second report this month indicating rising inflation. Traders should view this as a cautionary signal, especially given how quickly inflation has started climbing following the Fed's decision to cut interest rates. While inflation remains near the 2% target, a continued upward trend could compel the Fed to reconsider its easing of monetary policy.
Speaking of the Fed, the FOMC Minutes will also be released this week, providing insights into the central bank's latest meeting and the policy stances of its members. While this report typically doesn't move markets significantly, it offers valuable context for understanding the Fed's direction.
Finally, a reminder: U.S. markets will be closed on Thursday for the Thanksgiving holiday, and trading volume may be lighter throughout the week as traders and investors step away.