Weekly Stock Market Update & SPY Technical Analysis
Optimism grew in markets last week as positive headlines boosted confidence again, but a change of market leadership seems to be underway as investors make end of year adjustments.
Leading up to last week’s interest rate decision, investors were highly uncertain whether or not the U.S. central bank would proceed with another rate cut or not. The uncertainty was a result of the government shutdown, which paused all economic data for September and part of October. Without knowing inflation and labor market data, there was no way to tell if a rate cut was appropriate. The Fed did cut rates by 25 BPS, which was followed by a press conference from Fed Chair Powell. Some highlights include:
- Powell emphasized that this move reflects a shift in risk balance…inflation still above target and labor market weakening.
- Powell noted that rates are now within a broad estimate of neutral, meaning monetary policy is neither stimulative nor restrictive. Future decisions will be data dependent.
- The labor market is softening, with unemployment creeping up and hiring slowing. Powell highlighted this as part of the rationale for the cut.
- Inflation remains somewhat elevated (especially goods prices due to tariffs), but core inflation and expectations are moderating toward the Fed’s 2 % target.
Powell’s comments mean we’re not out of the woods just yet, but we are moving in the right direction on the inflation battle. This is a relief because the theme this year has been tied to the impact of tariffs on prices, the data suggests that prices are still under control. This big concern now is the labor market, which looks good on paper, but Powell states that hiring appears to be overstated. If the Trump administration is really overstating hiring and the data is worse than it is, it could raise red flags next year as a high unemployment rate leads to recession.
Why do we pay attention to the Fed so much?
Because the Federal Reserve sets short-term interest rates and strongly influences the bond market, which ultimately sets the “price of money” for everything else.
When rates move, borrowing costs change. That impacts housing, corporate profits, consumer spending, and how investors value stocks. Even if you never touch a bond, bond yields affect equity multiples, risk appetite, and where capital flows. Last week, The Fed said they’d begin buying short term
Nvidia’s Move on China:
After months of lobbying, CEO Jensen Huang convinced the Trump administration to allow Nvidia to sell its H200 chip to China, giving the company access to a big customer, but also giving China access to the best AI chips around. Prior to this approval, the U.S. restricted the performance threshold allowed to China, only giving them access to Nvidia’s H20 chips. The H200 boosts performance by six times the current model, leaving some afraid that this will give China an edge in the AI race as they have already “maxed out” the performance power of the H20. Whether this is a point of worry depends on one’s views of China’s relations with the U.S.
As for Nvidia, if China begins to ramp up orders, this could unlock billions of new revenue for the company and only boost outlook. But the question is whether or not China will buy. The company’s next quarterly earnings is late February 2026, we’ll get to hear the numbers and how much China contributed to sales at that point.
Key economic data this week:
- U.S. Unemployment Report (Tuesday PM)
- U.S. Retail Sales (Tuesday PM)
- Initial Jobless Claims (Thu PM)
- Consumer Price Index - Inflation Report (Thu PM)
- Consumer Sentiment (Fri 10 AM ET)
PM = Pre-market.
We will be covering each report as they are released and speaking about the implications of it in our daily morning updates for our Hyper Stocks Pro members.