What Will Happen in the US Stock Markets This Week? Analysis and Predictions

US Stock Markets Agenda for the Week of November 17

The S&P 500 index closed with a limited decline throughout the period, while the Nasdaq 100 faced pressure due to profit-taking in AI-focused stocks. The Russell 2000 index, representing small-cap companies, is struggling to hold at critical support levels. The VIX index, reflecting investors' cautious stance, is approaching a one-month high.

Agenda Highlights

Last week, the US government shutdown ended after lasting 43 days. About 1.4 million federal employees will have their salaries reimbursed, and more than 4,000 furloughed employees are set to return to their positions. These developments may provide limited support for consumer spending and economic activities in the short term.

However, critical data flows such as the CPI and unemployment figures for October complicate the assessment of the current state of the economy. A cautious stance is observed in the markets ahead of the Fed's meeting scheduled for December 9-10. The likelihood of a rate cut in December appears low, but differing views among Fed members and market fluctuations will shape the dynamics of the meeting.

Technical Indicators and Expectations

This week, the S&P 500 is expected to go through a volatile process, seeking support at the 50-day moving average levels. If the index closes above this level, there may be increased buying interest. However, the high levels of the VIX index and the testing of critical levels by the index may serve as a warning signal for some investors.

This week, the focus will be on Nvidia’s earnings announcement and the performance of tech stocks above their 50-day moving averages. Maintaining these levels could create a positive short-term outlook, while closes below could raise downward risks.

Nvidia's Role and Expectations

Nvidia holds a critical position that will determine market trends due to its leadership in AI and data center topics. Analysts anticipate that NVDA's third-quarter revenue will be around $54.9 billion, with earnings per share expected to rise by 54% to $1.25. Growth in the data center segment and restrictions on sales to China are among the significant factors affecting stock movements.

The options market has placed high expectations on the stock ahead of the earnings report. However, any unexpected shortcomings or data below forecasts could lead to sharp pullbacks in the indexes. This process has the potential to create volatility, especially in tech-heavy indexes.