StoneX Self-Directed Analyst Article

US futures                                         

Dow futures -0.20%, S&P futures -0.42%  & Nasdaq futures -0.65%

In Europe                                                                        

FTSE -0.79% & DAX -1.04%

• Stocks fall and are set to fall across the week
• Concerns over tech valuations linger
• Musk’s $1 trillion pay package is approved
• Oil falls for a second week

Tech rout continues

US stocks are set to open modestly lower on Friday, with the leading indices on track for a sharp weekly decline amid concerns over the economy and lofty valuations in the tech sector, which weighed on sentiment.

Three main indices have been under pressure this week, with the Nasdaq falling almost 2% on Tuesday and on Thursday after Wall Street executives warned of a market correction. The S&P 500 and the Dow are both on track for their steepest weekly decline in four, whilst the Nasdaq is on track for its worst weekly performance since March.

Optimism surrounding AI and Fed rate cuts had pushed markets to record highs this year; however, concerns over the monetization of AI and circular spending in the industry have hit enthusiasm for the stocks this week.

Given the ongoing U.S. government shutdown, data is in short supply. Attention will be on the University of Michigan consumer confidence, which has so far remained resilient despite the ongoing government shutdown and signs of a weakening jobs market. Yesterday, Challenger job cuts hit 150,000 for October, the highest level in two decades.

The market is pricing in around a 68% probability of a rate cut in December, down from 90% before the Fed meeting last week but still up from 62% earlier this week.

Corporate news         

Tesla shares are just 0.5% lower pre-market as investors weigh up Musk’s $1 trillion pay package, which shareholders approved. Over 70% of shareholders voted in support of the pay package valued at up to $1 trillion over the next decade if performance targets are met. The approval represents an endorsement of Musk’s vision to transform Tesla into an AI and robotics powerhouse. The board had indicated that Musk would leave the company if the pay package were not approved, which could drag the share price lower in the process. This vote supports the view that Musk is Tesla's biggest asset.

Peloton is rising 4% as it swung to a surprise profit in the fiscal first quarter. The fitness company posted EPS of $0.03 on revenue of $550.8 million; expectations had been for the company to break even on revenue of $540.7 million.

Airbnb is rising by about 4% after the company posted a revenue beat in the third quarter and raised Q4 revenue forecasts. Earnings per share for the latest quarter came in below estimates.

Dow Jones forecast – technical analysis.

The Dow Jones ran into resistance at 48,000 and has eased lower, testing support around the 47000 zone, the October 2 high. The price remains above its rising trendline and 50 SMA, so the bullish bias remains. However, the shooting star candlestick is a reason to be cautious; this is often a bearish reversal pattern. A break below 47,000 zone could open the door to 46,300, the rising trendline, and 50 SMA support. A break below 45,200 would create a lower low.

FX markets – USD falls, EUR/USD rises

The U.S. dollar is falling away from a five-month high reached earlier in the week and is on track for a roughly flat finish as the market weighs up the possibility of a December rate cut after yesterday’s weak Challenger job cut report.

EUR/USD is rising for a third straight day and is on track to book gains of 0.2% across the week. The euro drew support for my expectations of a steady policy rate, whilst both the US and the UK are seen cutting rates further in 2026.

GBP/USD is falling, down 0.3% this week, marking its third straight weekly decline. Data shows that UK construction activity has fallen to its lowest level since 2020, whilst a survey of companies' employment expectations for the year ahead fell for the first time in nearly 5 years. Data points to nervousness in the economy ahead of Rachel Reeves' budget later this month.

Oil falls for a second week.

Oil prices are rising towards 60.00, snapping a four-day losing run. However, oil prices are still set to fall 1.6% this week, marking the second straight weekly decline.

Oil sold off this week amid concerns about excess supply and slowing US demand. The unexpected build of 5.2 million barrels reignited supply fears this week. Concerns about the impact of the most extended U.S. government shutdown in history were also pressuring prices.

The Trump administration has ordered flight reductions at major US airports owing to a shortage of air traffic controllers, whilst data yesterday pointed to a weakening US labour market.

Data from China was weak overnight, with exports unexpectedly falling. However, China's crude imports in October rose 2.3% from September and up 8.2% from a