16 October 2025,03:13
Daily Market Analysis
16 October 2025, 03:13
*Strong Q3 results from major banks and continued optimism in artificial intelligence kept equities supported despite macro headwinds.
*Powell’s reaffirmation of two rate cuts by year-end 2025 reinforced a favorable liquidity backdrop for equities.
*Market sentiment hinges on the resolution of the U.S. government shutdown threat and potential de-escalation in the U.S.–China trade tensions.
Market Summary:
Wall Street demonstrated resilience in the last session, effectively shrugging off a trio of macroeconomic concerns: renewed U.S.-China trade tensions, the looming threat of a government shutdown, and pressure on the U.S. dollar. The Dow Jones Industrial Average closed nearly flat after a recent rally, while the Nasdaq Composite found firmer footing, advancing 148 points.
The market’s buoyancy was anchored by two key pillars. Firstly, a robust start to the Q3 earnings season provided a fundamental boost, with major financial institutions like Morgan Stanley and Bank of America posting solid results, which in turn bolstered the broader banking sector. Secondly, persistent optimism surrounding artificial intelligence continues to act as a primary market driver, propelling tech giants such as Nvidia and AMD to further gains.
Sentiment was further supported by the recent dovish signaling from Federal Reserve Chair Jerome Powell. The market has interpreted his latest commentary as cementing the path for two additional interest rate cuts before the end of 2025, fostering a favorable environment for risk assets.
Looking ahead, while Wall Street trades with a positive bias, the resolution of key uncertainties could serve as significant catalysts. A bipartisan agreement to avert a government shutdown would likely provide a fresh boost to market confidence. However, the most substantial upside potential lies in a meaningful de-escalation of trade frictions between the U.S. and China, which would remove a major overhang on global equity valuations.
Technical Analysis
The Nasdaq Composite is consolidating within a potentially bullish technical formation, exhibiting a defined ascending triangle pattern as it tests a key resistance level near the 24,817.00 mark. This pattern follows a robust recovery from last week’s sharp decline, with the index having successfully reclaimed the critical 61.8% Fibonacci retracement level at 24,735. This price action suggests underlying strength and sets the stage for a potential bullish breakout.
A decisive and sustained break above the 24,817.00 resistance would confirm the ascending triangle pattern, signaling a resumption of the prior uptrend and setting a new bullish target.
However, this optimistic setup is challenged by a clear divergence in momentum indicators. The Relative Strength Index (RSI) is hovering neutrally near its mid-point, failing to exhibit strong bullish conviction. More notably, the Moving Average Convergence Divergence (MACD) has generated a bearish death cross while above its zero line. This signal often indicates that near-term upward momentum is vanishing and can precede a period of consolidation or pullback.
Resistance Levels: 24,985.00, 25,183.00
Support Levels: 24,575.00, 24,350.00
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