The U.S. equity markets closed relatively flat on Wednesday in a volatile session shaped by monetary policy decisions and major technology earnings. Thursday’s Asian session opened with a modest uptick, with the SPX 500 rising 0.10%, the NDX 100 adding 0.12%, and the Russell 2000 showing greater strength with a 0.38% gain.
According to Vijay Valecha, Chief Investment Officer, Century Financial, the session reflected investor caution following the Federal Reserve’s decision to cut interest rates by 25 basis points during the October FOMC meeting, a move widely anticipated by the markets. However, Fed Chair Jerome Powell’s subsequent comments unsettled investors when he signaled that a December rate cut was far from certain.
“The SPX 500 briefly dipped to $6,859 before rebounding,” said Vijay, noting that optimism returned following strong post-market earnings from Microsoft, Alphabet, and Meta.
Alphabet crossed the $100 billion quarterly revenue mark, with its shares surging 6.5% in after-hours trading. Microsoft, on the other hand, saw its stock dip 4% amid concerns over AI-related spending and an Azure outage. Meta shares fell more than 7%, affected by a one-time charge linked to Trump’s Big Beautiful Bill, despite posting its strongest revenue growth since Q1 2024.
“Investors are now turning their attention to earnings from Apple and Amazon, which will complete the lineup of five of the MAG 7 companies reporting this week,” Vijay added.
Technical Outlook on SPX
From a technical standpoint, Vijay observed that the SPX index maintains a bullish market structure. The daily RSI stands above 66, reflecting strong momentum without reaching overbought territory.
“The index is trading comfortably above short-term moving averages,” Vijay said, pointing to a rebound from the 21-EMA on the 4-hour chart, indicating support near $6,876. With the index currently less than half a percent below its record high of $6,929, a breakout above that level could signal further bullishness.
Dollar Index (DXY)
The U.S. Dollar Index (DXY) closed 0.41% higher at 99.14 on Wednesday, buoyed by Powell’s cautious remarks and investor optimism around the U.S.–China trade agreement, according to Vijay. In early Asian trading on Thursday, the DXY eased slightly to around 99, down 0.13%.
Despite the Fed’s rate cut, the dollar strengthened as markets had largely priced in the decision. “Powell’s tone tempered hopes for aggressive near-term easing, helping the dollar maintain its footing,” Vijay explained.
He added that the greenback could continue to strengthen if U.S.–China trade relations improve further, boosting global growth and demand for U.S. assets. Traders are now eyeing Q3 GDP data for fresh insights into the Fed’s policy trajectory.
The EUR/USD pair slipped 0.43% yesterday but is up 0.22% today, trading around 1.162, with resistance at 1.163 (50-day SMA) and support near 1.157. Meanwhile, the yen weakened after the Bank of Japan held rates steady at 0.5%.
On the charts, Vijay noted that DXY is trending positively, trading above its 9-, 21-, and 50-day SMAs, with support at 98.88 and resistance at 99.35 — yesterday’s high.
Crude Oil
WTI crude rebounded 0.28% after three consecutive sessions of decline, lifted by optimism surrounding U.S.–China trade talks and a sharp drop in U.S. inventories. “WTI prices found a floor at $60.022 and are now holding near $60.40,” Vijay said.
He added that U.S. crude stockpiles fell by 6.86 million barrels, far exceeding expectations of a 1.2 million-barrel decline — a clear sign of tightening supply and strong demand.
“Fundamentally, WTI remains bullish,” Vijay remarked. “Optimism around trade negotiations and falling inventories provide a favorable backdrop for oil.”
Technically, he pointed out that WTI is consolidating between $60.25 and $60.70 on the one-hour chart. “A breakout above $60.70 could drive prices toward $61.335, while a drop below $60.25 may trigger short-term weakness.”
Brent crude rose 0.55%, with consolidation expected between $63.512 and $64.233. A move above $64.23 could open the door toward $65.47, the 50-day SMA resistance, Vijay added.
Gold and Silver
Gold prices stabilized at $3,970, rising 1% and ending a four-day losing streak, while silver gained 0.24% to $47.50. The move followed the Fed’s rate cut and renewed optimism from the Trump–Xi meeting.
“The Fed’s decision to lower rates to 3.75%–4.00% boosts gold’s appeal relative to yield-bearing assets,” Vijay commented. Historically, gold has rallied 26–39% within 24 months following similar rate cuts amid economic uncertainty.
He noted that while the trade deal temporarily reduced safe-haven demand, its partial nature kept underlying hedging interest intact. “Most analysts remain medium- to long-term bullish, with consensus targeting $5,000 per ounce within a year,” Vijay said.
Central bank demand remains strong, with 634 tonnes of gold ETF accumulation so far this year. Meanwhile, the U.S. government shutdown continues to disrupt economic data, further supporting safe-haven demand.
Technically, Vijay observed that gold is consolidating between $3,945 and $4,029 on the 4-hour chart. “A breakout above $4,020 could open the path to $4,070–$4,145, while a drop below $3,893 might signal renewed weakness,” he said.
Silver rebounded from its recent $45.75 low, finding support at $46.84 and resistance near $48.16.
