US stock market analysis (October 10, 2023)

US stock market analysis (October 10, 2023)
Create at 1 month ago (Oct 10, 2023 09:21)

Stocks Rebound on Middle East Tensions, Energy Surges; Fed Eases Concerns

U.S. stocks closed higher on Monday, recovering from earlier losses triggered by escalating conflict in the Middle East. The surge in oil prices, driven by the Israel-Hamas war, influenced Wall Street's major indexes, particularly boosting energy stocks.

A senior Hamas official expressed openness to discussions about a possible truce with Israel. President Joe Biden directed his team to coordinate with regional partners to deter any exploitation of the situation.

The news of the conflict initially fueled an oil rally due to supply concerns. Nevertheless, stock indexes reversed their earlier declines, partly due to more dovish comments from Federal Reserve officials. The shift in focus by investors towards U.S.-centric matters, coupled with reassurance from the Fed regarding long-term Treasury bond yields, alleviated concerns among equity investors.

On the other hand, the traditional safe-haven assets remained in demand, with gold experiencing a 1.6% increase, though the U.S. dollar index retreated from earlier gains, falling by 0.18%.

Chevron Corp saw a notable rise of over 3% after the Israeli government ordered the shutdown of natural gas production at the Tamar platform in the Mediterranean for safety reasons. The broader surge in energy stocks was supported by rising oil prices, driven by fears of disruptions in the oil-rich Middle East.

As a result, the S&P energy sector emerged as the top gainer among the S&P 500's 11 major industry sectors, ending up 3.5%. However, airlines, including United, Delta, and American, suspended direct flights to Tel Aviv, causing their shares to decline by over 4% each and putting pressure on the S&P 500 Passenger Airlines index, which lost 3.7%.

Defense companies experienced a rally in response to the Israel news, with the S&P 500 Aerospace & Defense index recording its biggest one-day percentage gain since November 2020. Notable gainers included Northrop Grumman and L3Harris Technologies.

Looking ahead to Tuesday's trade, investors will closely monitor various economic indicators and speeches from Federal Reserve officials. The week also includes the release of key inflation reports that could influence the Fed's decision on interest rates. Earnings reports from major banks, starting with JPMorgan Chase later in the week, will provide insights into the economy, with a focus on consumer credit and spending trends. As a result, it could influence the trajectory of the broader U.S. stock market, with potential ongoing challenges stemming from the global economy's volatility and fragility. This encompasses the patterns observed in energy prices and the sustained elevation of borrowing costs.

Data for Technical Analysis (5H) CFD US 500 [S&P 500]

Resistance 4339.1, 4341.6, 4345.7

Support : 4330.9, 4328.4, 4324.3                      

5H Outlook  

US stock market analysis Source:

Buy/Long 1 If the support at the price range 4310.9 - 4330.9 is touched, but the support at 4330.9 cannot be broken, the TP may be set around 4340.8 and the SL around 4300.0, or up to the risk appetite.

Buy/Long 2 If the resistance can be broken at the price range of 4339.1 - 4359.1, TP may be set around 4370.0 and SL around 4320.0, or up to the risk appetite.       

Sell/Short 1 If the resistance at the price range 4339.1 - 4359.1 is touched, but the resistance at 4339.1 cannot be broken, the TP may be set around 4330.1 and the SL around 4369.0, or up to the risk appetite.

Sell/Short 2 If the support can be broken at the price range of 4310.9 - 4330.9, TP may be set around 4290.0 and SL around 4349.0, or up to the risk appetite.       

Pivot Points

Pivot Points
Classic 4319.4 4324.3 4330.1 4335 4340.8 4345.7 4351.5
Fibonacci 4324.3 4328.4 4330.9 4335 4339.1 4341.6 4345.7
Camarilla 4333.1 4334 4335 4335 4337 4338 4338.9
Woodie's 4320 4324.6 4330.7 4335.3 4341.4 4346 4352.1
DeMark's - - 4327.3 4333.6 4337.9 - -

Sources: Investing 1Investing 2

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