Despite a modest rebound on Friday afternoon, all major US equity indices declined over the week. The Nasdaq underperformed and recorded its weakest weekly performance since the sharp post–Liberation Day decline in early April. The market pullback can be explained by a number of factors: growing unease surrounding artificial intelligence developments, signs of labor market softening, ongoing tariff hearings, a lack of meaningful economic data, rising concerns over private credit, and persistently hawkish commentary from Federal Reserve officials. The U.S. federal government shutdown reached the longest on record during the week, which also appeared to weigh on broader sentiment. On the data side, consulting firm Challenger published a report showing that October layoffs hit highest level in over 20 years. According to ISM surveys, services activity returned to growth while manufacturing shrank for eighth month in a row. Meanwhile, University of Michigan Consumer sentiment indicator fell to lowest level since 2022. In Fixed Income, U.S. Treasuries short-and intermediate-term yields generally decreased while long-term yields increased. Outside the US, the pan-European STOXX Europe 600 Index ended the week 1.24% lower. The Nikkei 225 Index fell 4.1%. Mainland Chinese stock markets edged higher for the week as easing U.S.-China trade tensions boosted risk appetite. The dollar weakened. Gold was flat. Oil dumped while bitcoin tested $100k.
Have a great weekend
Charles & The Syz Research Lab