Stock market on October 29: S&P 500 and NASDAQ maintains strong upside momentum

[Ben Graham]

Yesterday, US stock indices closed with gains. The S&P 500 rose by 0.23%, while the Nasdaq 100 strengthened by 0.80%. The Dow Jones Industrial Average added 0.34%.

Asian indices have climbed today amidst optimism that artificial intelligence will continue to generate profits for major technology companies reporting earnings this week. The regional MSCI stock index increased by 0.4%. The technology sector outperformed, with shares of companies related to chip manufacturing, such as SK Hynix Inc. and Advantest Corp., surging after strong earnings reports. Japan and South Korea led the growth. However, in both the Nikkei 225 and Kospi, the number of declining stocks exceeded those that rose.

Shares of Nvidia Corp. surged by more than 8% during Asian trading. This occurred after President Donald Trump announced plans to discuss the company's Blackwell chip with Chinese leader Xi Jinping. This statement sparked optimism among investors hoping for relaxed export restrictions on advanced technologies to China. Blackwell, one of the most powerful graphic processors in the world, is critical for the development of artificial intelligence and machine learning. Export restrictions have significantly hindered Nvidia's growth in one of its largest markets. Potential negotiations scheduled for the end of this week between Donald Trump and Xi Jinping could be a turning point. A successful outcome to the talks and the easing of export restrictions would grant Nvidia access to the Chinese market, which would undoubtedly boost its financial performance.

Futures for the S&P 500 index rose by 0.2%, while Nasdaq 100 futures increased by 0.4%. The futures indicate a somewhat weaker start for European stocks. With five major technology companies, accounting for about a quarter of the NASDAQ index, set to report earnings from Wednesday to Thursday, investors will soon be able to assess whether the billions invested in computing infrastructure will yield profit. "We expect another strong round of megacap tech earnings reports, given the relentless demand for AI technology and infrastructure," stated Bellwether Wealth. "While profitability in AI remains an unknown, investors for now are willing to overlook this as the AI arms race heats up."

This year's stock market rally is accompanied by concerns that the AI boom plays a major role in this growth.

In other market segments, the yen strengthened after US Treasury Secretary Scott Bessent commented on the potential policies of the Bank of Japan, bolstering expectations for interest rate hikes. Oil continued its three-day decline amid rising signs of oversupply, while gold experienced a slight increase after three days of decline.

Regarding the technical picture of the S&P 500, the main task for buyers today will be to overcome the nearest resistance level of $6,914. This will help the index gain ground and pave the way for a breakout to the new level of $6,930. An equally important objective for bulls will be to maintain control above $6,946, which would strengthen buyers' positions. In the event of a downward move driven by reduced risk appetite, buyers must assert themselves around the $6,896 area. A break below this level would quickly push the trading instrument back to $6,874 and open the path toward $6,854.

The material has been provided by InstaForex Company - www.instaforex.com