US Market Overview
On October 20, 2026, US equity markets experienced a rebound, primarily driven by better-than-expected GDP growth in China for Q3 2026 and a recovery in chipmakers. The S&P 500 index approached its 50-day simple moving average (SMA) at around 7,705, while the Nasdaq 100 led the gains with an increase of 1.2%. This upward movement occurred despite rising US Treasury yields, which raised concerns about the potential impact on sectors that heavily rely on capital spending, particularly technology.
European and Asian Markets
In contrast, European markets closed lower, influenced by unrest in France and its fiscal challenges. The French CAC 40 index fell by 1.1%, continuing a downward trend that has persisted since August. The index traded near 7,817 after a brief recovery earlier in October. Meanwhile, Asian markets also faced declines, with Japan's Nikkei and South Korea's KOSPI dropping by 1.5% and 4.2%, respectively.
Foreign Exchange Market
In the foreign exchange market, the US Dollar Index (DXY) showed some resilience, closing off its lowest levels supported by daily support around 101.81. The euro faced pressure, nearing May 2025 lows of US$1.1065, largely due to the ongoing situation in France. The Canadian Dollar (CAD) remained stable despite a slight increase in the year-over-year headline Consumer Price Index (CPI) to 3.1%, which was below market expectations.
Commodities Market
In commodities, oil prices rebounded after earlier losses, with West Texas Intermediate (WTI) trading above US$98 per barrel and Brent crude approaching US$110. This increase was attributed to renewed supply fears in the Persian Gulf following reports of tanker incidents in the Strait of Hormuz and ongoing Houthi attacks on Saudi Arabia. However, technical resistance near US$112 for Brent could limit further gains.
Upcoming Economic Reports
Looking ahead, the UK labor market report is expected to be released, with economists predicting an increase in the unemployment rate to 5% from 4.9% in August. Additionally, US earnings reports from companies like RTX and GM are anticipated, with Netflix set to report after market close.