Strong corporate earnings and expectations of monetary easing drove global stocks to a four-day rally, setting new records. The MSCI All-Country World Index rose after hitting a fresh closing high in the previous session. Optimism about a U.S. "soft landing" and expectations of Fed rate cuts in 2026 eased valuation pressures, boosting risk appetite. Meanwhile, gold and silver prices surged to new highs.
On December 23, U.S. stock futures dipped slightly after overnight gains, while European stocks declined and most Asian markets advanced. Treasury yields fell, the dollar weakened, and the yen strengthened. Precious metals and copper rose, while oil stabilized after four consecutive days of gains. Cryptocurrencies faced downward pressure.
The Fed’s policy path and AI-related capital expenditure outlook remain key market drivers. Fed Governor Stephen Milan warned that unless the central bank continues cutting rates next year, the economy risks slipping into a recession.
Ken Wong, an Asian equity portfolio specialist at Hong Kong-based East Asia Investment, noted: "Despite some pullback in AI-related stocks and soft sentiment, we expect 2026 to remain robust as companies continue heavy capital expenditure in AI."
Key market movements:
- **U.S. futures**: Dow (-0.1%), S&P 500 (-0.14%), Nasdaq (-0.15%). - **European stocks**: Euro Stoxx 50 (flat), DAX (flat), FTSE 100 (-0.15%), CAC 40 (-0.1%). - **Asian markets**: Nikkei 225 (+0.02%), Topix (+0.5%), KOSPI (+0.3%). - **Currencies**: Dollar index below 98 (5-day low), USD/JPY at 156.09 (-0.6%), offshore CNY above 7.02 (highest since Oct 2024), GBP/USD at 1.3502 (highest since Oct 2). - **Bonds**: 10-year U.S. yield at 4.15% (-1bp), Japan’s 10-year yield at 2.03% (-5bp). - **Commodities**: Gold at $4,481.50/oz (+0.85%), silver at $69.34/oz (+0.4%), copper at $11,942/ton (+0.14%), Brent crude at $61.44/barrel (-0.2%). - **Crypto**: Bitcoin (-1%) at $87,363.32, Ethereum (-0.9%) at $2,959.42.
U.S. futures edged lower pre-market after overnight gains. The S&P 500 erased its December losses and is poised for an eighth straight monthly rise—its longest streak since 2018—led by Tesla and Nvidia.
Investors are assessing whether the bullish momentum can extend into 2026. Fund managers continue adding equity exposure while holding cash at historic lows. Despite lofty tech valuations, optimism prevails. Markets widely expect two Fed rate cuts next year.
**Novo-Nordisk A/S** (NVO) surged 7% in Europe after its oral weight-loss drug won FDA approval, temporarily outpacing rival Eli Lilly, which expects its own oral treatment to be approved by March.
The yen strengthened for a second day, with USD/JPY breaching 156. Japan’s Finance Minister emphasized readiness to act against speculative currency moves, despite the BoJ’s recent rate hike failing to lift the yen.
Gold hit a record $4,486/oz, fueled by Fed rate-cut bets and geopolitical tensions near Venezuela. Silver also reached new highs above $70/oz. Oil steadied after a four-day rally as supply risks—including U.S. interceptions of Venezuelan tankers and Middle East tensions—overshadowed weak fundamentals.
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