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Artificial intelligence stocks have begun to waver slightly, experiencing a selloff period in the first week of this month. The Nasdaq has fallen approximately 2%, wiping out around $500 billion in market value from top technology companies.
Palantir Technologies dropped nearly 8% despite beating Wall Street estimates and issuing strong guidance, highlighting growing investor concerns about stretched valuations in the AI sector.
Nvidia shares also fell roughly 4%, while the broader selloff extended to Asian markets, which experienced some of their sharpest declines since April.
Wall Street executives, including Morgan Stanley CEO Ted Pick and Goldman Sachs CEO David Solomon, warned of potential 10-20% drawdowns in equity markets over the coming year.
And Michael Burry, famous for predicting the 2008 housing crisis, recently revealed his $1.1 billion bet against both Nvidia and Palantir, further pushing the narrative that the AI rally may be overextended.
As we near 2026, the sentiment around AI is seemingly starting to shift, with investors beginning to seek evidence of tangible returns on the massive investments flowing into AI, rather than simply betting on future potential.
However, despite the recent turbulence, many are simply characterising this pullback as "healthy" profit-taking rather than a fundamental reassessment of AI's value.
Supreme Court Raises Doubts About Trump’s Tariffs
The US Supreme Court heard arguments overnight on the legality of President Donald Trump's "liberation day" tariffs, with judges from both sides of the political spectrum expressing scepticism about the presidential authority being claimed.
Trump has relied on a 1970s-era emergency law, the International Emergency Economic Powers Act (IEEPA), to impose sweeping tariffs on goods imported into the US.
At the centre of the case are two core questions: whether the IEEPA authorises these sweeping tariffs, and if so, whether Trump’s implementation is constitutional.
Chief Justice John Roberts and Justice Amy Coney Barrett indicated they may be inclined to strike down or curb the majority of the tariffs, while Justice Brett Kavanaugh questioned why no president before Trump had used this authority.
Prediction markets saw the probability of the court upholding the tariffs drop from 40% to 25% after the hearing.
The US government has collected $151 billion from customs duties in the second half of 2025 alone, a nearly 300% increase over the same period in 2024.
Should the court rule against the tariffs, potential refunds could reach approximately $100 billion.
The court has not indicated a date on which it will issue its final ruling, though the Trump administration has requested an expedited decision.
Shutdown Becomes Longest in US History
The US government shutdown entered its 36th day today, officially becoming the longest in history. It surpasses the previous 35-day record set during Trump's first term from December 2018 to January 2019.
The Senate has failed 14 times to advance spending legislation, falling short of the 60-vote supermajority by five votes in the most recent vote.
So far, approximately 670,000 federal employees have been furloughed, and 730,000 are currently working without pay. Over 1.3 million active-duty military personnel and 750,000 National Guard and reserve personnel are also working unpaid.
SNAP food stamp benefits ran out of funding on November 1 — something 42 million Americans rely on weekly. However, the Trump administration has committed to partial payments to subsidise the benefits, though delivery could take several weeks.
Flight disruptions have affected 3.2 million passengers, with staffing shortages hitting more than half of the nation's 30 major airports. Nearly 80% of New York's air traffic controllers are absent.
From a market perspective, each week of shutdown reduces GDP by approximately 0.1%. The Congressional Budget Office estimates the total cost of the shutdown will be between $7 billion and $14 billion, with the higher figure assuming an eight-week duration.
Consumer spending could drop by $30 billion if the eight-week duration is reached, according to White House economists, with potential GDP impacts of up to 2 percentage points total.
Hawkish and Dovish are two crucial words widely used in our industry whenever there are central bank speeches or talks about monetary policies. But what does it mean? Central banks are more transparent than ever and forex analysts or traders try to dissect the overall tone and language used when central bankers speak to see: How the economy is flaring How interest Rate will change or foresee How the monetary policy will develop over time and affect the value of a country’s currency A hawkish tone means that a central bank is seeing the economy growing too fast and is warning the markets of excessive inflation.
Therefore, to curb inflation and slow economic growth, central banks might increase interest rate which will be positive for the domestic currency. A dovish tone is a complete opposite – The economy is not growing and the central bank is warning against deflation. In other words, there might be interest rate cuts to stimulate the economy which is negative for the domestic Currency.
Put simply, when there is a Hawkish tone, there are talks about tightening monetary policy which will probably lead to interest rate hikes. On the other side, a dovish central bank will use easing or accommodative monetary policy which will result in interest rate cuts. Recently, Major Central Banks of Key economies have turned dovish due to slowing global growth and this week the Reserve Bank of New Zealand joined the dovish chorus as well.
This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk.
Liquidity Crisis High levels of liquidity happen when there is both supply and demand for an asset, meaning transactions can take place easily. A market is considered to be liquid if it can absorb liquidity trades with significant changes in price. A liquidity crisis is, therefore, an acute shortage or drying up of liquidity.
In simple terms, it occurs when there is a simultaneous increase in demand and a decrease in the supply of liquidity across many financial institutions or businesses. As the impact of the coronavirus has rattles markets, global central bankers and governments are ramping up efforts to address liquidity issues across markets. Gold – A Highly Liquid Asset In times of uncertainties, investors generally seek safety with traditional haven assets like Gold.
Why is Gold also selling off? Gold is set apart as it has a feature of a liquid asset just like cash. Investors are on the hunt for liquidity which is prompting the gold market sell-off.
An environment of thin liquidity and high volatility is forcing investors to unlock capital in gold to fulfil liquidity requirements. Gold was seen outperforming this year which makes it a profitable asset- prompting investors to take profit. As the turmoil in global stocks intensifies, investors are looking for ways to cash in to meet margin calls.
At the same time, the safe-haven status of the gold is being hammered by a stronger US dollar. Despite the Fed’s bold emergency rate cuts, the greenback made an impressive comeback against its peers. Another wave of global easing hits markets, making the US dollar the preferred choice compared to other major currencies.
The unusual tandem between the US dollar and Gold seen since the beginning of the year seems to have also faltered at the start of March. Gold has recently lost some of its haven appeal as investors search for liquidity, but it has remained around elevated levels seen in the past 12 months. On Tuesday, reports of a big stimulus package of more by $1 trillion have helped the gold to rebound slightly Source: Bloomberg Terminal Gold Stocks Gold is a victim of the sell-off because of its outperformance and liquidity features which are beneficial to investors during times of financial crisis.
However, gold miners’ stocks have the potential to rally in anticipation that the price of precious metals will go up once the markets stabilise. In the Australian share market, the rebound on Tuesday was mostly driven by the gold mining stocks, which surged by more than 15% despite a fall in gold price. Source: Bloomberg Terminal It is therefore not uncommon for gold to act as a source of liquidity at the start of a liquidity crisis.
As investors are convinced that central banks’ intervention measures like rate cuts and quantitative easing will inject enough liquidity in the financial market, Gold will likely find buyers.
In the wake of the global financial crisis, the G20 summit has become a popular forum of global governance and cooperation. In the heat of the disaster, G20 members came together to sustain global financial stability. The G20 has been a useful pool of information and decision making that have steered the global financial markets since 2008.
G7 Summit The Group of Seven consists of the most industrialised and advanced countries in the world representing 58% of global net worth and 30% of the world’s economy. The G7 Summit focuses on the broader array of economic and political challenges. G20 Summit The financial crisis in 2008 recognize the era where countries need to seek more cooperation among themselves to promote a sound global financial system.
Therefore, the G20 is primarily dedicated to international economic cooperation and allows China, India and other emerging nations to take a more significant global role. It acknowledges the shift towards emerging economies. G20 accounts for 84% of global investment and 63% of the world’s population.
Argentina has set “Building Consensus for fair and sustainable development” as the slogan for the leaders’ summit this year concentrating on three key priorities “ the future of work, infrastructure for development and food security. ” However, protectionism measures have been the main talks ahead of the summit. In the meeting in Bali earlier this year, all the members agreed that heightened trade and geopolitical tensions are among the most critical downside risks in the short and medium term. The G20 summit is, therefore, the “Golden Opportunity” for Trump and other leaders to engage in trade talks.
Face- to face meetings might be better to ease trade frictions. As of writing, news that China has outlined a series of trade concessions are emerging. Hence, investors are optimistic that the G20 meeting might bring more positive news than anticipated couple of weeks before given that the US-China decided to restart trade negotiations.
The Summit has the potential to move the financial markets, and any headlines will likely go under intense scrutiny. Mark Your Calendar – 30 November – 01 December!! *Follow us on Twitter for more updates regarding the upcoming G20 summit
Fundamental Analysis: Macro Factors The rapidly growing global interconnectedness means that the health of one country's economy can impact the world markets. As a result, traders generally follow the economic calendar to ensure that they do not miss out on any relevant indicators that may signal a move in the financial markets. In this article, we are going to review some major macroeconomic factors.
Economic Growth It is essential to understand how an economy grows to recognize the current economic environment in which an individual is investing and to predict how the market will move. In broad terms, economic growth is mainly driven by: Consumer Spending Business Investment Economic Growth is widely measured by Gross Domestic Product (GDP) which is defined as the total value of goods and services provided in a country during one year. If the health of the economy is robust, individuals and investors feel confident about the economy, which will likely boost consumer spending and business investment.
If the economy is weak, individuals would most probably save rather than spending to prepare for difficult situations. Similarly, investors will be more cautious and show some reluctance in investing in riskier assets. They will also likely seek safety with safe-haven assets.
Recently, we saw that as and when economic indicators fueled the fears of a global economic slowdown, investors seek safety with gold or other safe-havens. Employment Another significant economic data release is the Labour report. Every month, investors look at the three main components of the employment report to gauge the strength of the economy: Jobs creation: The number of new jobs created helps to assess whether the economy is growing.
Generally, a large number of new jobs is positive and is a sign that the economy is flourishing. When the numbers begin to fall, it can signal a slowing economy. Unemployment rate: Rather than the actual monthly figure, analysts normally will observe the trend in the rate to see if the labour market is contracting or expanding.
Unemployment rate helps to determine the inflationary and interest rate expectations. For example, any figure below the Non-Accelerating Inflation Rate of Unemployment (NAIRU) level will force the markets to begin to factor in a higher inflation rate. Wage Growth: Wages are the biggest indicator of consumer spending but do also have a flipside.
It can be a significant cost for a business, but it is also a source of spending and consequently means revenue and profit for a business. Even though analysing its effect on the economy can be complexed, traders tend to monitor wage growth to gauge future interest rate expectations. Inflation Inflation is an important economic concept.
It is a sustained rise in overall price levels. For trading purposes, we will try to keep it simple. The rate of inflation is important as it depicts the rate at which the real value of an investment is eroded and the loss in spending or purchasing power over time.
High inflation normally signals that the economy is overheating, while moderate inflation is often associated with economic growth as it means businesses and consumers are spending more money on goods and services. Consumer Price Index (CPI) and Producer Price Index (PPI) are the most followed indicators aside from other inflationary pressures widely monitored by traders. Interest Rates Interest rates can have a rippling effect on the economy, which is why investors generally focused on forecasting any changes in interest rate to make better financial decisions.
Any changes in interest rate can cause an immediate reaction in the financial markets even though it may take time to see the actual effects on the economy. To understand the various economic impacts, we will analyze the effects of raising interest rates in relation to consumer spending and investment. Higher interest rates mean: Higher borrowing costs Higher mortgage repayments More incentive to save than to spend Reduced consumer and business confidence.
Both consumers and investors are less willing to spend and invest in riskier assets. All in all, a rise in interest rate will reduce consumer spending and investment. Inflation and economic growth will, therefore, tend to be lower.
Hence, central banks will use the interest rate as a tool to curb or boost inflation to reach the desired level of economic growth. Investors are keen to monitor and analyze economic indicators to foresee the next move by Central banks as any changes in interest rate can create investment opportunities.
President Trump is on the “Tweet Rally” with positive headlines on the trade front and much confidence ahead of the Summit in Hanoi, Vietnam. Singapore Summit The Singapore Summit marked the first-ever meeting between the Head of State of North Korea and the United States. Both leaders signed a joint statement during the Summit and agreed on: Security guarantees New peaceful relations The denuclearisation of the Korean peninsula The recovery of the American soldiers The first meeting was “big” on the geopolitical front and made history, but the Summit delivered little on the specifics or concrete details on a roadmap to complete denuclearisation.
After a wild 2017 whereby a series of new missile was tested, North Korea undertook a few significant steps: No ballistic missiles or nuclear weapons Blown up the entrances to its atomic test site Hanoi Summit The relationship between both countries has undergone a dramatic turnaround, and there were probably more diplomatic communications than before: “If I were not elected president, you would have been in a war with North Korea,” Trump said last week. “We now have a situation where the relationships are good — where there has been no nuclear testing, no missiles, no rockets.” However, the expectations around the second meeting are relatively low compared to last year. The months that followed the Summit provided little optimism that there will be complete denuclearisation. Washington wants more concrete steps from Pyongyang while North Korea demanded the US to take more corresponding measures.
Bearing in mind that 2020 elections are looming, President Trump is under pressure to produce a concrete roadmap to denuclearisation. A lack of major breakthrough could have some negative political ramifications for President Trump. We saw a softer stance by the US President in the run-up to the Summit: "I don't want to rush anybody.
I just don't want testing. As long as there's no testing, we're happy." The President also hinted that North Korea has the potential to become an “economic powerhouse”. Does the vast majority of investors think the same?
How much of their nuclear weapons is North Korea willing to give up for fresh economic investment?
In the month of May, major currencies were stronger against the US dollar as risk sentiment improved and haven currencies like the US dollar, the Yen and Swiss franc have lost momentum. Commodity-linked currencies were among the best performers against the US dollar; lifted by higher commodity prices. Source: Bloomberg The US Dollar As geopolitical tensions continue to rip through markets, protests following the death of Mr George Floyd is spreading nationwide and overshadowing the reopening of states and raising fears of new waves of coronavirus outbreaks, the US dollar might struggle to rebound.
The US dollar index which tracks the performance of a basket of currencies against the greenback is back to levels seen mid-March. US Dollar Index Source: Bloomberg The Antipodeans Australia and New Zealand were able to better contain the spread of the virus and have eased lockdown measures quicker compared to their peers. Both the AUDUSD and NZDUSD pairs are back to trading in the familiar levels seen before the sharp plunge linked to the coronavirus jitters.
However, the US-China tussle is keeping a lid on gains and at those levels, traders will likely await for fresh positive catalysts to push the pairs higher. AUDUSD and NZDUSD (Daily Chart) Source: GO MT4 Australia seems to have gone through the worst of the pandemic and the lockdown measures are slowly easing across the country. While the national health outcomes were better than feared, the reopening of the economy is also happening faster than initially anticipated.
After the Australian Treasury announced the $60 billion accounting error, investors were reassured that the Australian economy was not as severely impacted as initially forecasted. The coordinated monetary and fiscal measures have helped the RBA and the government to provide assistance to households and businesses. The Bank taped into quantitative easing (QE) mid-March for the first time in history and purchased $50 billion of Australian Government Securities (AGS) and semi-government securities (semis).
Given that the measures put in place are working as broadly as expected, the RBA has even started to scale back daily market open operations. Unlike some major central banks, the RBA has also ruled out negative interest rates. Based on the current developments and the prospects of a quicker recovery, the RBA is widely expected to remain on hold on Tuesday and to maintain a less-dovish tone compared to its peers recently.
The recent Governor Philip Lowe’s speech before the Senate Select Committee was also broadly positive about the economy and its recovery. The Aussie dollar may have some room for upside momentum if the Bank maintains its optimistic tone. Other notable events to watch are the GDP numbers and Retail Sales figures on Wednesday and Thursday.
In New Zealand, the economic calendar is relatively subdued for the week. There are enough positive developments to help the Aussie dollar and Kiwi to hold on to gains. However, the Antipodeans may struggle to push the rally seen recently further as US-China risks loom.
The Euro The downside risks for the Eurozone have eased which has helped the Euro to advance higher, but the shared currency was unable to benefit fully from the overall risk-on sentiment and the weakness of the US dollar dragged by the political dynamics within the Eurozone. On the economic calendar, the focus will be on the ECB. Interest rates are not expected to shift, but attention will be on the central bank’s decision to expand the QE program.
Following recent comments from policymakers, market participants are widely expecting more easing next Thursday with an expansion of the Pandemic Emergency Purchase Programme (PEPP) by EUR500 bn. The impact on the shared currency would likely depend on the extent the ECB will go to support the eurozone economy. Until geopolitical risks recede and there is a compromise on the EU recovery plan, the EURUSD pair may struggle to firm outside its current range and significantly above the 1.10 level.
EURUSD (Daily Chart) Source: GO MT4 The Pound The Sterling Pound was the worst performer against the US dollar in May and will likely remain under pressure dragged by Brexit uncertainties. The negotiations have stalled and as the deadline for extending the transition period is coming closer, traders are finding little positive narratives to rule out a no-deal Brexit. All eyes are on the resumption of Brexit negotiations this week.
As of writing, the GBPUSD pair is trading just below the 1.24 level - buoyed mainly by the broad weakness in the US dollar. GBPUSD (Daily Chart) Source: GO MT4