U.S. Stocks Rally to End Tough Week

The stock market witnessed a significant rebound on Friday, with the major indices recovering some of the ground lost earlier in the weekThe markets had entered a rising trend, but a sudden plunge on Wednesday had thrown the Dow Jones and S&P 500 indices out of their established upward channelsFortunately, the Dow managed to defend its medium to long-term uptrend line while the S&P 500 showed signs of halting its decline, indicating a potential recoveryMeanwhile, the Nasdaq, which had previously descended close to its channel support level, had returned to an upward trajectory as well.

This week also saw the Nasdaq Golden Dragon Index, which tracks the performance of Chinese stocks, bouncing slightly after a period of downward movementDespite this recovery, it faced opposition at previous high resistance levelsCurrently, it has receded back to the vicinity of its mid to long-term uptrend line and is experiencing fluctuations around this support level, holding firm for now, although there are no visible signs of a significant rebound yet.

On the sectors' front, the S&P Real Estate and S&P Biotechnology indices had exhibited a jittery but overall upward trend over the longer term

Recently, however, they encountered a setback that led to retracementsThese indices not only fell below crucial support levels but also displayed a short-term downward trendThe losses endured over the last two days were substantial, and even with a rebound occurring on Friday, it remains uncertain if this marks the end of their downward slide.

In the realm of commodities, gold and silver futures had previously demonstrated an upward movement that has now seen significant retraction, resulting in a halt and subsequent dropThe critical short-term uptrend line has been breached, with a more pronounced decline noted especially for silver, which fell below its mid to long-term trend lineNevertheless, indicators of a rebound emerged on Friday, suggesting a possible stabilization, as silver prices found their way back to key support levels.

Meanwhile, oil futures have been experiencing a downward slide and fell close to their lowest points while oscillating around support levels, forming a horizontal trend reminiscent of a box-like consolidation

After reaching a peak pressure level again, the oil markets faced renewed downward pressure, leading to further declines into the middle of the trading boxAs a result, the prospects for continued decreases in the short term remain plausible.

A closer look at the long-term trends in the oil and gas markets highlights a year-long phase of horizontal consolidation characterized by an uptick that faced impediments, pushing values lowerHaving previously remained stable in the mid-range, the sudden series of downturns have seen market prices breach previous low support levels, inching ever closer to the bottom boundaries of the trading rangeA critical break below this level would signal a long-term bearish trend.

The week has been eventful for the Dow Jones index itself, which ended the week on a strong note, notwithstanding the earlier declines it experiencedThe index faced its longest losing streak since 1974 after lackluster inflation data eased fears regarding the possibility of the Federal Reserve becoming more hawkish in the upcoming year.

As of 4:00 PM Eastern Time, the Dow climbed by 497 points, a notable 1.2% increase

However, this recovery followed earlier losses that had plunged the index down by 1,100 points within the same weekBoth the S&P 500 and the Nasdaq Composite shares also gained approximately 1.1%, further bolstering investor confidence as the week wrapped up.

On the consumer front, the latest data signified a dip in personal consumption expenditures, calming anxieties about the Federal Reserve's potential tightening policies in response to inflationIn November, inflation appeared subdued, particularly as it reduced bond yields across the board.

The Personal Consumption Expenditure Price Index, a key inflation measure favored by the Federal Reserve, showcased a 2.4% rise year-on-year, slightly below the anticipated 2.5%. Month-on-month adjustments revealed a mere 0.1% increaseExcluding the volatility introduced by food and energy prices, core PCE saw a 2.8% ascent against an expected 2.9% forecast.

This derivative data sparked relief for investors as concerns of uprising inflation once again shifted focus onto the Federal Reserve, especially as consumer price increases in November soared to levels not seen in seven months

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The new administration's potential approval of measures that may heighten inflation through trade and tax policies remains at the forefront of economic discussions.

In an analytical report shared recently, Morgan Stanley conveyed, "We anticipate that the core PCE's year-on-year growth rate will revert to a downward trend by the first quarter of 2025, suggesting a likelihood for the Federal Reserve to initiate a 25 basis point rate cut in March 2025."

In the corporate sector, FedEx's shares took a hit despite surpassing second-quarter earnings expectations, with the delivery behemoth publicizing plans to split its freight divisionThe split appears to have overshadowed earlier gains.

Similarly, shares of sportswear giant Nike dipped by 0.2%, despite a strong second-quarter performance as the company hinted at "serious problems" in its earnings guidance.

Additionally, Novo Nordisk A/S experienced a notable decrease of over 17% after an advanced trial revealed that its anticipated weight-loss medication did not meet expectations, dampening the stock's performance.

Amid a tumultuous week, the looming specter of a government shutdown has injected an additional layer of uncertainty into financial markets