US futures
Dow futures 1%, S&P 500 futures 0.7% & Nasdaq futures 0.7%
European futures
FTSE 0.6%, DAX 1%
- US stocks point higher as dip buyers step in
- Nvidia is set to open 5% lower on reports surrounding Jensen Huang
- US inflation data is due tomorrow
- Oil is falling further after Brent tumbled 16% last week.
U.S. Stocks extend recovery as dip buyers step in and oil prices fall
U.S. stocks are rising, extending gains from Friday, as oil prices decline and bargain hunters step in, although Nvidia falls amid controversy surrounding CEO Jensen Huang.
After a rollercoaster week following the midterm elections and a massive sell-off in tech stocks, investors are looking to see whether the move was overdone. Following a 5.5% decline on Thursday, the Nasdaq recovered 1.75% on Friday and is rising again at the start of the new week. This suggests that investors were trimming positions rather than abandoning the AI trade completely, with bargain hunters prepared to step in.
However, the smaller gains seen in Nasdaq futures compared with the Dow suggest investors remain cautious. Shares of chipmakers are still falling pre-market.
Still oil prices continue to decline, helping to ease inflationary worries.Treasury yields are falling further to 4.84%, helping to support riskier assets.
The U.S. economic calendar is quiet on Monday ahead of tomorrow's inflation data. CPI is expected to rise to 3.9% in October, up from 3.7%, while core CPI is expected to rise to 2.8% from 2.6%.
The inflation figures come after Friday's nonfarm payroll report, which saw 165,000 jobs added, well above the 65,000 forecast. The resilience and strength of the jobs market leave attention firmly focused on inflation for the Fed's next move.
The market is pricing in an 80% probability of a Fed hike in December. Hot inflation could cement those expectations.
Corporate movers
Nvidia is trading 5% lower after reports that the company has opened an investigation into CEO Jensen Huang's relationship with a businesswoman, Alice Huang, who is allegedly a Chinese spy. Alice Huang is affiliated with a cloud company, Mega Speed, which is also an Nvidia customer. U.S. intelligence agencies have reportedly expressed concerns that she is passing information to Beijing. Given Huang's central role in Nvidia's success and the wider AI investment narrative, any speculation about leadership uncertainty could unsettle investors.
AMD is rising 3.2% after Oppenheimer upgraded the chipmaker to Outperform from Perform and lifted its price target to $600 a share, suggesting 34% upside following strong Q3 results last week.
Shares of chipmakers are falling, with Intel, Marvell Technology and Qualcomm trading down between 0.1% and 1%. The Philadelphia Semiconductor Index ended Friday with its biggest weekly decline since March 2025.
Meanwhile, hyperscalers Microsoft, Alphabet and Meta are trading 1% to 1.8% higher.
S&P 500 forecast – technical analysis
The S&P 500 faced rejection at 7,700, falling to find support at 7,300, the July low. The price has recovered from this level and risen above resistance at the 200 EMA at 7,370. Should this level hold, it keeps the longer-term outlook stable.
Should support hold, buyers will look towards 7,500, the September low, followed by 7,620 horizontal resistance. Above here, the price would be on a firmer footing.
A break below the 200 EMA could see sellers turn attention towards 7,300 and 7,225, the June low. A break below here opens the door to 7,000, the January high.
FX markets – USD falls, GBP/USD rises
The U.S. dollar is falling on Monday, giving back Friday's gains. The dollar posted its largest daily rise in almost six months on Friday, following the strong U.S. jobs report and as market sentiment improved. Today, the continuing recovery from the AI sell-off is prompting safe-haven outflows from the U.S. dollar. Furthermore, falling oil prices are supporting the macro backdrop and pulling the dollar lower. U.S. inflation data this week will be the next key catalyst.
EUR/USD is rising amid a weaker U.S. dollar, despite eurozone investor confidence falling in November. Sentix investor confidence slipped to 2.4, down from 2.7 in October, with economic expectations deteriorating amid elevated interest rates, high energy prices and political uncertainty.
GBP/USD is rising, recovering the previous two days' losses amid U.S. dollar weakness and upbeat market sentiment. The Bank of England hiked rates by 25 basis points to 4% on Thursday, with some policymakers calling for further hikes to tame inflation. While the UK economic calendar is quiet today, UK GDP data on Friday will be a key focus.
Oil extends declines on hopes of diplomacy in the Middle East
Oil prices remain under pressure after last week's sharp sell-off, as the Democrats' victory in the U.S. midterm elections and President Trump's comments lowered expectations of further strikes on Iran, raising hopes of de-escalation in the Middle East.
Brent fell 16% last week, its steepest weekly decline since the Covid pandemic, while WTI dropped 12%.
The declines followed the midterm elections and the Democrats taking control of Congress, fuelling optimism around a diplomatic push in the Middle East. However, a comprehensive agreement between Washington and Tehran remains elusive.
Trump said on Sunday that he was unlikely to order further attacks on Iran while negotiations continued. Yet attacks on shipping near the Strait of Hormuz persist, with markets looking for the normalisation of transit before pricing in further downside.
Meanwhile, JP Morgan warned of an emerging oil glut, estimating that supply will exceed demand by 1.1 million barrels a day in September, widening to 1.4 million in October.
