US stocks dropped today as investors anxiously await Tesla's Q3 results, which are projected to show a 10% decline in profit, further weighing on market sentiment. The dollar index surged to 104.5, with growing concerns over the upcoming elections driving uncertainty. Meanwhile, investors are recalibrating their outlook on the Fed's monetary policy. While markets still expect a 25bps rate cut in November, they now anticipate a slower pace of easing, with a potential pause in December. The 10-year US Treasury yield ticked higher, closing at 4.22%, reflecting these shifts in sentiment.
Despite a strong dollar rally, a mixed day was seen across the base metals space today, underlining a growing disconnect between the complex and macroeconomic indicators. Zinc prices remained elevated at $3,144/t due to continued pressures from tightness in mined supply. The cash to 3-month spread is reflecting this, further strengthening into a backwardation of $49/t today. Likewise, aluminium found support at $2,600/t, closing at $2,669.50/t. Nickel continued to soften but hesitated to breach the $16,300/t level, leading to a slight rebound to $16,308/t. We believe that the market is showing signs of hesitation below the $16,000/t level, which could establish strong support for nickel in the near term.
Precious metals retreated after setting record highs yesterday. Gold fell back to $2,718/oz, while silver dropped below $34/oz, erasing yesterday's gains. Oil prices remained steady, with WTI trading at $70.8/bbl and Brent at $75.1/bbl.
All price data is from 23.10.2024 as of 17:30