Market Recap
The Nasdaq 100 extended its winning streak to four consecutive weeks, driven by a surge in Broadcom Inc., which ignited gains across the semiconductor sector. The tech-heavy index reached a new all-time high for the second time in three days, closing 0.8% higher. In contrast, the broader market displayed mixed results.The S&P 500 ended the day flat, shedding just 0.6 points, while the Dow Jones Industrial Average declined 1.8%.
Broadcom Leads Semiconductor Rally
Broadcom Inc. was the clear standout of the week. Its shares skyrocketed 24% to a record high after the company forecast a surge in demand for its artificial intelligence chips, propelling its market capitalization above $1 trillion. This bullish outlook spurred gains in its peers, including Marvell Technology Inc., Micron Technology Inc., and Nvidia Corp.
Shifting Sentiment Amid Rate Cut Expectations
Themarket’s moves this week were accompanied by a notable decline in Treasury yields, suggesting a shift in investor sentiment. As the Federal Reserve’s upcoming meeting approaches, expectations for a significant slowdown in the pace of interest rate cuts appear to be gaining ground.
Weekly Market Performance
For the week, the S&P 500 slipped –1.99%, the Dow Jones Industrial Average dropped –2.25%, and the Nasdaq Composite fell –1.78%.
Friday’s Closing Levels
| Index | Close | Change | % Change |
| DOW JONES | 43,828.06 | -86.06 | -0.20% |
| S&P 500 | 6,051.09 | -0.16 | +0.00% |
| NASDAQ | 19,926.72 | +23.88 | +0.12% |
| US 10 Y | 4.397% | ||
| VIX | 13.81 | -0.11 | -0.79% |
Market Sentiment: Volatility and Weak Breadth Raise Concerns
The week’s performance reflected a more cautious tone across the broader market, with weak market breadth emerging as a point of concern. The S&P 500 recorded ten consecutive trading days of negative breadth, meaning more stocks declined than advanced — a streak not seen since the aftermath of the September 11th attacks. This signals underlying weakness, even as some indices manage to post gains.
Inflation and Market Reaction
Inflation also remained in focus as key reports were released. The November Consumer Price Index (CPI) largely aligned with expectations. However, month-over-month inflation hit its highest level since April, raising eyebrows among analysts. Additionally, the Producer Price Index (PPI) came in hotter than expected, adding further inflationary pressures.
These inflation readings weigh on Federal Reserve policy expectations. While markets still anticipate a 25-basis-point interest rate cut at the next Fed meeting, there is growing uncertainty. Traders are bracing for the possibility that the Fed may delay or reduce the pace of future cuts, especially if inflation data remains sticky.
Investor Outlook: Is a Pullback Coming?
Market momentum remains strong, but some analysts are calling for caution. The Nasdaq’s sustained rally and the S&P 500’s new highs have fueled FOMO (fear of missing out), with investors continuing to chase gains. However, with inflation concerns, slowing breadth, and upcoming Fed decisions, a pullback may be imminent.
While it’s possible that the market continues to grind higher, there’s also a chance that we could see sideways trading or a mild correction. Traders should remain alert for signs of exhaustion, as extended market rallies often pave the way for profit-taking.
Source: CBOE, Bloomberg
This commentary is written by James Gomes, a seasoned finance industry veteran with extensive experience of over 30 years, including a substantial tenure at a reputable US bank exceeding 20 years.
Risk Disclosure
Securities, Futures, CFDs and other financial products involve high risks due to the fluctuation in the value and prices of the underlying financial instruments. Due to the adverse and unpredictable market movements, large losses exceeding your initial investment could incur within a short period of time.
Please make sure you fully understand the risks of trading with the respective financial instrument before engaging in any transactions with us. You should seek independent professional advice if you do not understand the risks explained herein.
Disclaimer
This information contained in this blog is for general reference only and is not intended as investment advice, a recommendation, an offer, or an invitation to buy or sell any financial instruments. It does not consider any specific recipient’s investment objectives or financial situation. Past performance references are not reliable indicators of future performance. Doo Prime and its affiliates make no representations or warranties about the accuracy or completeness of this information and accept no liability for any losses or damages resulting from its use or from any investments made based on it.
The above strategies reflect only the analysts’ opinions and are for reference only. They should not be used or considered as the basis for any trading decisions or as an invitation to engage in any transaction. Doo Prime does not guarantee the accuracy or completeness of this report and assumes no responsibility for any losses resulting from the use of this report. Do not rely on this report to replace your independent judgment. The market is risky, and investments should be made with caution.
