Opening Bell - Morning Commentary

Wall Street tumbled on Job cuts and concerns about Overvaluation.

The American markets (S&P 500 (-1.12%) and NASDAQ 100 (-1.91%)) tumbled on Thursday as Big Tech and AI stocks faced profit-taking amid mounting concerns about overvaluation. Nvidia, AMD, Palantir, and Tesla led declines, pressured by weak investor sentiment following alarming October layoff data.

October job cuts surged to 153,000— the worst for the month since 2003 and nearly triple of 2024 levels. Technology firms led the layoffs, intensifying fears about white-collar employment amid AI-driven restructuring.

The selloff extended Tuesday's weakness in AI-related stocks. AMD plunged 7.3%, while Palantir, Oracle, and Nvidia posted significant declines. Qualcomm dropped 3.6% despite beating earnings estimates and issuing upbeat guidance.

Investors remained focused on stretched valuations, the government shutdown, trade tariff rulings, and ongoing earnings reports. The major averages fell to their lowest closing levels in two weeks, erasing Wednesday's gains.

Bitcoin erased early gains to trade at $101,462, nearly 20% below October's all-time highs. Crypto markets tracked equity weakness amid economic uncertainty, reduced expectations of a Fed rate cut, and continued whale selling pressure.

Crude oil rose 0.44% to $59.69, pausing a prolonged decline. Surging U.S. inventories and OPEC+'s modest supply adjustments limited price gains, while Saudi Arabia's price cuts for Asian buyers signalled strong supply and fragile demand.

Gold rose 0.62% to $4,004/oz, near record highs, as investors sought safety amid risk aversion and stock market volatility.

The Nifty closed below its 20-DEMA for the second consecutive day, indicating short-term caution. The next crucial support zone lies between 25,400 and 25,450; a sustained move below this range could trigger further downside. On the higher side, 25,670 and 25,800 are likely to act as near-term resistance levels.

Indian markets are poised to open lower in line with weak global cues.