Major US indices staged bullish reversals, shrugging off AI-driven sell-off concerns. Strong ADP jobs (42K added) and ISM Services PMI (52.4) data lowered the probability of a December Fed rate cut to 62%. Asian markets followed.
Wall Street rebounds, Asia stocks follow rally
Key takeaways
- US equities rebounded: Major US indices reversed higher from key technical supports, led by the small-cap Russell 2000 (+1.5%) and Nasdaq 100 (+0.7%), as investors brushed off prior AI-driven sell-off pressures.
- Economic resilience cut rate expectations: Stronger-than-expected ADP jobs and ISM Services PMI data lowered the odds of a December Fed rate cut to 62%, tempering dovish bets.
- Asia followed Wall Street’s lead: Asian markets rallied in tandem, with Hang Seng up 1.6%, Nikkei 225 up 1.4%, and Singapore’s STI hitting a record high, buoyed by DBS’s Q3 earnings beat.
The US stock market shrugged off the prior session’s sell-off induced by overvaluation concerns on Artificial Intelligence (AI) related stocks, such as Palantir Technologies, and the major US stock indices managed to stage bullish reversals on Wednesday, 5 November, right above their respective key technical support levels that coincided with their 20-day moving averages.
The small-cap Russell 2000 led the advance with a 1.5% gain, followed by the Nasdaq 100, which climbed 0.7%. Meanwhile, the Dow Jones Industrial Average and S&P 500 lagged, posting more modest increases of 0.5% and 0.4%, respectively
On the economic front, with official data releases halted amid the ongoing US government shutdown, market participants have shifted their focus to private-sector data for guidance on economic conditions.
The ADP employment change data has shown an improvement in the US labour market. Private businesses in the US added 42K jobs in October 2025, rebounding after an upwardly revised 29K jobs cut in September, and above forecasts of 25K.
In addition, the ISM Services PMI rose to 52.4 in October 2025 from 50 in September, beating forecasts of 50.8, pointing to the strongest expansion in the US services sector since February.
Stronger-than-expected US economic data have tempered expectations for a Fed rate cut at the upcoming FOMC meeting on 10 December 2025. According to the latest CME FedWatch Tool, the probability of a 25-basis-point cut has fallen to 62%, down from about 70% a day earlier, which would bring the Fed funds rate to 3.50%–3.75%.
Conversely, the US dollar showed little positive reaction despite the reduced odds of a Fed rate cut. The US Dollar Index traded almost unchanged on Wednesday, 5 November, right at a key resistance zone of 100.10/100.50 that coincided with the 200-day moving average.
During today’s Asia session, the US Dollar Index extended its decline, slipping 0.1% intraday at the time of writing. The pullback appears to be driven by technical factors, as five consecutive sessions of gains had pushed the dollar into overbought territory.
Asia-Pacific equities tracked Wall Street’s upbeat momentum, posting broadly positive performances across the region. Hong Kong’s Hang Seng Index jumped by 1.6% to a 4-week high, led by China Big Tech stocks, reinforced by Nvidia CEO Jensen Huang’s comment that China is likely to beat the US in the artificial intelligence race on the sidelines of the Financial Times' Future of AI Summit.
Japan’s Nikkei 225 rallied by 1.4% while Singapore’s Straits Times Index added 1.4% to hit a fresh all-time intraday high of 4,480, supported by the share price of Southeast Asian banking giant, DBS, that soared by 3.8% as its Q3 earnings beat expectations.
Our YouTube video above contains the latest intraday technical analysis on the US Wall Street 30, US Nas 100, US SPX 500, Hong Kong 33, Japan 225, Germany 30, EUR/USD, GBP/USD, AUD/USD, USD/JPY, Gold (XAU/USD), and West Texas Oil.
