Nasdaq 100 Forecast: SPX rises as Amazon & Apple boost the mood

US futures                                         

Dow futures 0.31%, S&P futures 0.65%  & Nasdaq futures 1.14%

In Europe                                                                        

FTSE -0.5% & DAX -0.61%

• Stocks rise after yesterday’s selloff
• Indices are set for weekly and monthly gains
• Amazon jumps 11%, Apple rises 2.5% post earnings
• Oil rises but is set for a third monthly decline

Amazon jumps 11% post earnings

US stock indices are rising, recovering from yesterday’s Fed-induced losses, boosted by impressive earnings from Apple and Amazon, which have helped ro reassure investors over the trajectory for big tech.

The strong figures have helped investors move past worries about outside spending on AI, which came from Meta and Microsoft results, pulling the stock market lower on Thursday.

A row of stocks set to end the week and the month of October solidly higher, with the Dow Jones and the NASDAQ set for their longest streak of monthly gains since January 2018.

While expectations for faster Federal Reserve rate cuts had buoyed stocks earlier in the month, the Fed's cautious language on Wednesday prompted the markets to scale back expectations of a 1/3 rate cut this year. The market is pricing in just a 68% chance or a 25 basis point rate reduction in December, down from 90% just before the meeting.

Looking ahead to next week, attention will be on ADP payrolls and ISM services and manufacturing PMIs for further insight into the health of the US economy as the government shutdown continues. Any sign of weakness could prompt investors to raise rate-cut expectations once again.

Corporate news 

Amazon has jumped 11% in early trade on Friday after posting stronger-than-expected quarterly earnings amid strong growth in its cloud unit and surging AI demand. The e-commerce giant posted Q3 EPS of 1.95, beating estimates of $1.56. Revenue rose 13% to $180.2 billion, ahead of expectations of $177.75 billion. Sales at Amazon Web Services, its largest profit driver, jumped 20% to $33 billion, marking the fastest pace since 2022, as AI workloads boosted cloud demand.

Apple is rising after record earnings as smartphone demand and services income jump. Apple posted net income of $112 billion, up 20% from last year, on revenue of $102.5 billion, up 85% year on year and above expectations of $101.6 billion. Apple predicts the holiday season will deliver its best-ever quarter in sales, thanks to surging demand for the iPhone 17.

S&P500 forecast – technical analysis.

The S&P500 trades within a rising channel, hitting a record high of 6920, the upper band of the rising channel, before easing lower to 8665 at the time of writing. The RSI bearish divergence is a reason for caution. Buyers will look to rise above 6920 to fresh record highs towards 6950 and 7000. Support is seen at 6750, the early October high. Below here 6650, the 50 SMA and lower band of the channel come into focus. A break below 6500 creates a lower low.

FX markets – USD rises, GBP/USD falls

The U.S. dollar is rising and is set to rise across the week, hitting its highest level since July. The USD has been boosted this week by the Fed’s hawkish cut and easing US-China trade tensions.

EUR/USD is falling amid a stronger USD and is testing a key support level. The ECB left the rate unchanged yesterday, seeing policy in a good place. The decision was expected and had little impact on the EUR, which instead is trading to the tune of the USD. Today, German retail sales data rose 0.2% MoM vs -0.5% MoM in August.

GBP/USD has fallen to 1.31 – its lowest level since April amid a fragile fiscal outlook. The Chancellor will likely need to raise taxes to fill the fiscal gap. Tax hikes and spending cuts could slow growth, potentially forcing the BoE to cut rates more aggressively next year.

Oil rises but set to fall for a third straight month

Oil prices are rising today, but are on track for the third straight monthly decline amid a strong U.S. dollar, weak China data, and increasing supply concerns

The US dollar is trading near a three-month high against its major peers, making purchases of dollar-denominated commodities more expensive.

Meanwhile, Chinese factory or activity also shrank for a seventh straight month in October, raising concerns for the demand outlook in the world's largest oil importer.

More supply is expected to come, cushioning sanctions disrupting Russian oil exports. OPEC+ will meet this weekend and is expected to increase output by 137,000 barrels per day.