The S&P 500 and Nasdaq Composite ended the week on a passive note, slipping slightly on Friday as Nvidia shares continued their retreat, impacting the broader market sentiment. Despite these declines, the Dow Jones Industrial Average marked its best weekly performance since May, boosted by gains in key stocks like Salesforce and Cisco Systems. Last week saw significant market movements driven by technology stocks, as investors navigated through the complexities of an AI-fuelled rally and increasing signs of market overextension. 

Key Takeaways:

  • S&P 500 Closes Lower as Nvidia Declines: The S&P 500 fell 0.16% to close at 5,464.62 on Friday, impacted by a 3.2% decline in Nvidia shares. Despite this pullback, the index achieved a 0.6% gain for the week, hitting an intraday record of 5,505.53 earlier in the week.
  • Nasdaq Composite Dips Slightly: The Nasdaq Composite dropped 0.18% to settle at 17,689.36. The index remained flat for the week, demonstrating the broader tech sector’s influence on market performance.
  • Dow Jones Posts Best Week Since May: The Dow Jones Industrial Average edged up 0.04% to close at 39,150.33, securing a 1.45% weekly gain. Salesforce led the gains with a 5.3% rise, followed by Cisco Systems at 4.4%, and Amgen and Nike, both up nearly 4%. UnitedHealth was the biggest weekly loser, down nearly 3%.
  • Triple Witching Drives High Trading Volume: The U.S. market experienced its highest trading volume since March 15 due to the expiration of stock options, stock index options, and stock index futures options, known as triple witching.
  • Market Stability Amid Low Volatility: The S&P 500 has gone 377 days without a 2.05% sell-off, the longest stretch since the financial crisis. This low volatility period is highlighted by the VIX trading around 13, near historically low levels.
  • European Stocks Close Lower: The pan-European Stoxx 600 index ended the session down 0.69%, with bank stocks dropping 1.5%. Despite the weekly decline, the FTSE 100 Index gained 1.12% to 8,237.72. The CAC 40 fell 0.6% to close at 7,629. Carlsberg shares fell 9% after Britvic rejected two takeover bids, causing Britvic shares to jump 9%.
  • Mixed Performance in Asia-Pacific Markets: Japan’s Nikkei 225 dipped 0.09% to 38,596.47 following cooler-than-expected inflation data. South Korea’s Kospi fell 0.83% to 2,784.26, while Australia’s S&P/ASX 200 rose 0.34% to 7,796. Mainland China’s CSI 300 closed at 3,495.62, down 0.22%.
  • Oil Prices Post Second Weekly Gain: US crude oil prices fell on Friday but ended the week up nearly 2.9%. The West Texas Intermediate August contract closed at $80.73 per barrel, while Brent August contract settled at $85.24 per barrel. Gasoline consumption in the US surged to 9.4 million barrels per day, the highest level since the pandemic ended.

FX Today:

  • Gold Plummets on Solid US PMIs Shattering Rate Cut Expectations: The XAU/USD trades at $2,317, below its opening price after hitting a daily high of $2,368. The path of least resistance is to the downside, with the next support at $2,300. A breach of this level could see XAU/USD fall to $2,277 and further to $2,222. Further losses might see it reach the Head-and-Shoulders chart pattern objective between $2,170 and $2,160. Conversely, reclaiming $2,350 will expose resistance levels at the June cycle high of $2,387 and the $2,400 figure.
  • XAG/USD Sinks Below $30.00 as Bearish-Engulfing Pattern Looms: Silver prices dropped sharply, snapping two days of gains amid firm US Treasury bond yields and a strong US Dollar. XAG/USD trades at $29.53, down 3.86%. The first support is the 50-day moving average (DMA) at $29.09, which exposes $29.00. Breaching this level could lead to $28.66 and potentially drop towards the 100-DMA at $26.60. On the flip side, if XAG/USD resumes its uptrend, the next resistance level is $31.55. Clearing this level would target $32.00 before challenging the YTD high of $32.50.
  • GBP/USD Ends the Week Lower as Bearish Turnaround Steepens: GBP/USD closed Friday at a fresh five-week low of 1.2622, marking the pair’s third straight down week. The Bank of England’s (BoE) midweek rate hold did little to spark confidence in the GBP. A late-week upswing in US Purchasing Managers Index (PMI) lifted the US Dollar, pushing GBP/USD down 0.92% from its weekly peak near 1.2740. The pair is facing a steepening bearish decline, with candles on pace to fall back to the 200-day Exponential Moving Average (EMA) at 1.2585.
  • USD/JPY Surges Past 159.00, Approaches Yentervention Levels: USD/JPY has broken the 159.00 barrier and is approaching intervention levels last seen on April, when it reached 160.00. This previously triggered a reaction by the Bank of Japan, sending the pair tumbling 400 pips to 156.06. The pair remains upward biased, with resistance at 160.00 and the YTD high of 160.32. Potential support levels include 159.00, the high at 158.25, and further at 158.00 and 157.69.
  • NZD/USD Bulls Struggle to Hold Gains, Kiwi Outlook Turns Negative: On Friday, the NZD/USD extended its losing streak to three days, stabilising at 0.6115 after an unsuccessful rally attempt that reached a high of 0.6140. The bearish sentiment solidifies with immediate support at 0.6100. Additional support levels are the 100-day SMA at 0.6070 and the 200-day SMA at 0.6060. The pair must climb past the 20-day SMA at 0.6150 to improve the outlook, with higher resistances at 0.6170 and 0.6200.
  • Canadian Dollar Cools Heels Despite Retail Sales Beat: USD/CAD bounced higher on Friday, recovering from a fresh weekly low of 1.3675 to test above 1.3700 before encountering resistance at the 200-hour EMA at 1.3715. Daily candlesticks indicate a potential rebound from near-term support at the 50-day EMA near 1.3675. The pair remains in rough consolidation, with long-term technical support at the 200-day EMA near 1.3600 boosting bids.

Market Movers:

  • Sarepta Therapeutics Surges on FDA Approval: Sarepta Therapeutics’ shares skyrocketed 30% after the US Food and Drug Administration approved the expanded use of its gene therapy Elevidys for Duchenne muscular dystrophy. This approval includes traditional use for patients 4 years and older who can walk, and accelerated approval for those who cannot, significantly boosting investor confidence.
  • Hertz Global Rises on Upsized Bond Offering: Hertz Global shares rose 16% following the announcement of an upsized bond offering, increasing from an initial $750 million to $1 billion. This move reflects strong investor interest as the company seeks to refresh its fleet of vehicles.
  • Asana Jumps on Share Buyback Plan: Asana’s stock popped more than 15% after the software firm announced a share buyback plan worth $150 million. The repurchase program is expected to be completed by June 30, 2025, signalling confidence in the company’s financial health and future prospects.
  • Gilead Sciences Continues Rally: Gilead Sciences’ shares gained approximately 3%, building on an 8.5% rally from the previous session. The company announced that its twice-per-year shot for preventing HIV was 100% effective in a late-stage trial, driving investor optimism.
  • LendingTree Falls on Cyberattack Report: LendingTree shares declined around 2.5% after Bloomberg reported that hackers are auctioning off stolen consumer data from the online lending platform. This cyberattack, targeting the company’s cloud computing provider Snowflake, has raised concerns over data security.
  • Palo Alto Networks Gains on Positive Coverage: Shares of Palo Alto Networks rose around 3% after coverage was initiated with a buy rating and named it a top pick. The firm highlighted Palo Alto’s unique position in multiple areas of cybersecurity and projected that its total addressable market could more than double between 2023 and 2028.
  • Spirit AeroSystems Jumps on Boeing Buyback Rumours: Spirit AeroSystems’ shares jumped 6% following reports from Reuters that Boeing is close to a deal to buy back the supplier. This potential acquisition reflects strategic moves within the aerospace industry to consolidate and streamline operations.

The S&P 500 and Nasdaq Composite experienced minor declines, largely influenced by Nvidia’s retreat, yet the Dow Jones posted its best weekly performance since May, driven by strong gains in key stocks like Salesforce and Cisco Systems. The market’s resilience amid low volatility, highlighted by a record stretch without significant sell-offs, underscores investor confidence despite signs of an overextended rally. Central bank decisions and economic data continue to shape market dynamics, with notable movements in oil prices and sector-specific stocks. As we move forward, investors remain vigilant, balancing hopes for technological advancements with the realities of economic indicators and global market conditions.