What's Moving Markets: Nasdaq, Sterling and Oil | Week Ahead 2nd November 2026

Regime: Mixed, in transition

Key Market Moves

• US tech sold off. The Nasdaq fell over 5% in October. Alphabet dropped 12% in one day and Intel 28.6%. Markets are questioning whether AI spending will pay off.

• This is not full risk-off yet. The VIX was flat at 19.42 and credit spreads tightened to 326bp. Money is moving into energy and defensive stocks rather than leaving the market.

• Sterling is strong. The BoE is expected to raise rates on 5th November while the ECB held at 2.50%. Sterling is at its strongest against the euro since April 2025.

• Oil is rising on Iran. Brent hit its highest level since April, up 13.6% in October, after a mine attack on a tanker in the Strait of Hormuz.

Will the Fed Raise Rates?

• Likely. Markets put the chance of a December hike at around 70% to 80%.

• Euro area inflation is 3.8%, but the ECB held rates. That gap favours the dollar over the euro.

Trades to Focus On

• GBP: EUR/GBP short. The BoE is raising rates while the ECB holds. Invalid if the BoE holds.

• EUR and USD: EUR/USD short. The Fed is likely to hike and the ECB isn't. Invalid if euro area inflation comes in at 4% or higher.

• The EUR/GBP and EUR/USD shorts both rely on a weak euro, so one euro surprise could hit both.

• Nasdaq 100 short. Tech earnings have disappointed and chip stocks had their longest losing streak since 2008. Credit markets aren't confirming the sell-off yet, so this is a tech story, not a broad market one. This lines up with my NQ1! trade plan from 22nd October. Invalid if the VIX declines with credit spreads tight.

• Oil: Brent long. Attacks in Hormuz keep supply tight. Invalid on US–Iran de-escalation, or if January Brent settles below $110.

News to Watch

• Mon 2 Nov, US ISM manufacturing. Last month was 54.5. A strong number makes a Fed hike more likely and could firm up the dollar.

• Tue 3 Nov, US midterm elections. A US strike on Iran after the vote could lift oil prices.

• Wed 4 Nov, euro area inflation (CPI). A reading of 4% or higher could revive bets on an ECB hike, which would lift the euro and hurt both euro shorts.

• Thu 5 Nov, Bank of England. Expected to raise by 0.25%. A hold would hurt the EUR/GBP short.

• Fri 6 Nov, US jobs report (NFP). Last month was +29,000. A weak number makes a Fed hike less likely and the dollar weaker. A strong number does the opposite.

These are my views based on my own analysis at the time of writing. Nothing here is financial advice. Always do your own research and manage your risk.