On Friday, the three major U.S. stock indices closed higher, capping a week of gains as investors awaited the Federal Reserve's December policy meeting next week. Data released Friday showed U.S. consumer spending stalled in September, suggesting Americans were tightening their belts amid persistent inflation ahead of a potential government shutdown. The core personal consumption expenditures (PCE) price index, excluding food and energy, rose 0.2% month-over-month and 2.8% year-over-year.
**U.S. Stocks** The Dow Jones Industrial Average gained 104.05 points (0.22%) to close at 47,954.99, while the Nasdaq Composite rose 72.99 points (0.31%) to 23,578.13. The S&P 500 added 13.28 points (0.19%) to finish at 6,870.40. For the week, the S&P 500 climbed 0.31%, with the Nasdaq and Dow advancing 0.9% and 0.5%, respectively.
**European Stocks** Germany's DAX 30 rose 133.70 points (0.56%) to 24,028.06, while the UK's FTSE 100 fell 44.62 points (0.46%) to 9,666.25. France's CAC 40 dipped 7.29 points (0.09%) to 8,114.74, and the Euro Stoxx 50 edged up 4.42 points (0.08%) to 5,722.50. Spain's IBEX 35 dropped 64.07 points (0.38%) to 16,682.53, and Italy's FTSE MIB declined 86.07 points (0.20%) to 43,433.00.
**Crude Oil** January WTI futures settled 0.69% higher at $60.08 per barrel, reflecting lingering risk premiums amid stalled Russia-Ukraine peace talks. February Brent crude rose 0.49% to $63.75. Negotiations between Ukrainian and U.S. officials in Florida entered a second day, with Russia opposing parts of a U.S.-backed peace plan. Market participants are monitoring talks, as progress could ease sanctions and flood the market with more Russian oil, further pressuring prices amid expected oversupply.
An institutional survey showed OPEC maintained stable crude output in November, adopting a cautious strategy amid global market weakness. The group's average daily production slightly exceeded 29 million barrels, flat from October. While OPEC+ agreed to continue restoring output in Q4, it significantly slowed the pace after earlier surges. Global oil markets show signs of oversupply, with forecasts predicting wider surpluses in 2026 as production outpaces demand. The UAE boosted output by 60,000 barrels per day (bpd) to 3.61 million bpd in November, exceeding its OPEC+ quota, but minor cuts by Iran, Gabon, and Saudi Arabia offset the increase.
**Cryptocurrencies** Bitcoin fell over 3% to $89,285.08, while Ethereum dropped more than 3% to $3,029.27.
**Precious Metals** Spot gold declined 0.23% to $4,199.20 after hitting an intraday high of $4,259.42.
**Macro Developments** September core PCE inflation cooled, potentially paving the way for Fed rate cuts next week. The Fed's preferred inflation gauge remained below 3% annually, with modest monthly price gains unlikely to deter policymakers from considering easing. The core PCE annual rate dipped to 2.8% from 2.9% in August.
The University of Michigan's preliminary December consumer sentiment index rose 2.3 points to 53.3, driven by younger demographics. While financial expectations improved, overall sentiment remained cautious amid high prices. One-year inflation expectations fell to 4.1% (the lowest since January 2025), while long-term expectations dropped to 3.2%.
Strong Canadian employment data prompted traders to fully price in a Bank of Canada rate hike by October 2026. Overnight swaps now reflect expectations for tightening next year, reversing prior bets on cuts.
European Central Bank policymaker François Villeroy de Galhau noted downside inflation risks outweigh upside threats, pledging action if price growth remains below 2%. He cited euro strength and cheap Chinese imports as deflationary forces.
**Corporate News** Netflix's (NFLX.US) $72 billion acquisition of Warner Bros. Discovery (WBD.US) helped push global 2025 M&A volume toward 2021's record $3.8 trillion. U.S. dealmaking surged 53% to $1.8 trillion, nearing historic highs.
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