Market Insights - Week of November 3rd

Major Indices Outlook for the Week Ahead

Welcome back to the Hobbs Trades weekly newsletter! As your go-to market analyst here at www.hobbstrades.com, I'm providing a comprehensive overview of the major indices—S&P 500, Nasdaq 100, Dow Jones, and Russell 2000—as we enter the trading week starting November 3, 2025. Last week's earnings from Big Tech giants like Amazon and Microsoft delivered mixed results, with tariff concerns and a hotter-than-expected PCE print capping gains, though small caps continued to shine. With the U.S. presidential election on Tuesday and the FOMC decision mid-week, volatility is set to spike as markets price in policy shifts and leadership outcomes. Broader trends favor caution near-term, but long-term bullishness persists on growth and easing. Let's break it down.

## Recent Performance Recap

Major indices closed last week with modest declines amid earnings digestion and election jitters. The **S&P 500** settled at 6,682.12, down 0.39% for the week, pulling back from highs after a 0.45% Friday drop. The **Nasdaq 100** fell to 24,798.54, down 0.48% weekly, pressured by tech sell-offs despite AI optimism, with YTD gains at ~22%. The **Dow Jones** dipped to 46,291.03, down 0.59% for the week, weighed by industrials and tariff fears. The **Russell 2000** bucked the trend at 2,478.63, up 0.42% daily and 0.42% weekly, extending its rotation rally with a 13.5% YTD advance.

October ended mixed, with the S&P 500 up 1.8% monthly despite late-week pressure. Valuations remain stretched—S&P at 23x forward earnings, Nasdaq at 28x—but 8% projected 2025 EPS growth and Fed easing support resilience. Recent X chatter is charged with election speculation, traders bracing for volatility with Nasdaq targets at 25,000 and Russell holds above 2,450, while flagging tariff and policy risks.

## Key Price Levels for Futures

Futures trade cautiously pre-election, with FOMC and results as pivotal triggers. Here's what to watch for each index:

* **S&P 500 (ES Futures)**: Trading around 6,682, support near 6,650 (recent low), with cushions at 6,630–6,640 and deeper 6,600 if selling intensifies. Resistance at 6,700–6,720 (recent highs), eyeing 6,750 or 6,780 on clarity.

* **Nasdaq 100 (NQ Futures)**: Near 24,799, support at 24,700, with 24,600–24,650 and 24,400 below. Resistance at 25,000 and 25,100 could yield to 25,300 post-event.

* **Dow Jones (YM Futures)**: Around 46,291, support at 46,100, with 45,900–46,000 and 45,700 as zones. Resistance at 46,400 and 46,500 may lead to 46,700 on stability.

* **Russell 2000 (RTY Futures)**: At 2,479, support at 2,450, with 2,430–2,440 and 2,400 deeper. Resistance at 2,500 and 2,520 opens paths to 2,550+ on rotation.

Breakouts above resistances could rally on dovish outcomes; breaches below supports may accelerate risk-off.

## ETF Options Chain Insights

Options volume surges pre-election, with heavy flow on November expirations (November 7, 2025) reflecting event hedges. Implied volatility spikes to 15-20% ATM, with put skew signaling downside protection. Key high open interest strikes:

* **SPY (S&P 500)**: Closed ~668. Calls at 670 (OI ~10,000, vol 55,000, IV ~16.0%) show limited upside bets; puts at 660 (OI ~8,500, vol 40,000, IV ~18.5%) dominate hedging. Put bias on uncertainty.

* **QQQ (Nasdaq 100)**: Closed ~598. Calls at 600 (OI ~2,500, vol 60,000, IV ~19.0%) reflect guarded optimism; puts at 590 (OI ~7,500, vol 48,000, IV ~21.0%) guard valuations. Heavy put skew on tech risks.

* **DIA (Dow Jones)**: Closed ~463. Calls at 465 (OI ~4,300, vol 300, IV ~17.5%) eye cyclicals; puts at 460 (OI ~1,100, vol 700, IV ~19.0%) balance flows. Puts lead on tariff fears.

* **IWM (Russell 2000)**: Closed ~248. Calls at 250 (OI ~2,100, vol 6,000, IV ~20.0%) bet on resilience; puts at 245 (OI ~3,500, vol 4,200, IV ~22.5%) reflect policy sensitivity. Elevated put IV amid rotation.

Puts outpace calls, with high IV across OTM strikes—positioned for election and FOMC swings.

## Economic Events to Watch This Week

The election and FOMC dominate, with data secondary but informative. Key highlights:

* **Monday, November 3**: ISM Manufacturing PMI (10:00 ET), consensus 48.5; Construction Spending (10:00 ET).

* **Tuesday, November 4**: U.S. Presidential Election; no major data; Fed speakers.

* **Wednesday, November 5**: FOMC Rate Decision (2:00 ET), expected 25bps cut; Powell Press Conference (2:30 ET).

* **Thursday, November 6**: Initial Jobless Claims (8:30 ET), consensus 235K; Trade Balance (8:30 ET).

* **Friday, November 7**: Nonfarm Payrolls (8:30 ET), consensus +110K; Unemployment Rate, consensus 4.1%.

Policy outcomes rule—dovish Fed and clear election could spark relief rallies; uncertainty may prolong volatility.

## Outlook for the Week

Event risk overshadows fundamentals, with S&P 500 and Nasdaq 100 poised for 8-12% year-end upside if policy clarity emerges and 8% EPS holds. Dow targets 7-9% on cyclicals, while Russell 2000, at a 26% discount, eyes 2,550+ in rotations. Bullish above supports with resolution catalysts; bearish on gridlock or hawkish turns testing lows. Options scream caution—expect sharp moves mid-week.