Overnight US stocks | The three major stock indexes fell sharply, US bonds declined, and the market waited for the Federal Reserve's decision
The Zhitong Finance App learned that on Monday, the three major indices closed down. The “Big Seven US stocks” had mixed ups and downs, and chip stocks rose. Investors are waiting for the Federal Reserve's interest rate decision this week. Although the market generally expects interest rates to be cut by 25 basis points, the “Federal Reserve Shadow Chairman” Hassett's remarks were not dovish enough to suppress expectations of easing next year. The three major US stock indices closed down, and US debt generally declined.
[US stocks] At the close, the Dow fell 215.67 points, or 0.45%, to 47739.32 points; the NASDAQ fell 32.23 points, or 0.14%, to 23545.90 points; the S&P 500 index fell 23.89 points, or 0.35%, to 6846.51 points. Chip stocks rose. Micron Technology (MU.US) rose more than 4%, Broadcom (AVGO.US) rose nearly 3%, Nvidia (NVDA.US) rose nearly 2%, and AMD (AMD.US) rose more than 1%.
Paramount Tianwu announced a $108.4 billion snap purchase of Warner Bros. Explore, and both companies closed higher. Data streaming company Confluent was acquired by IBM for $11 billion, and its stock price soared more than 29%. Crude oil fell nearly 2%.
[European stocks] The German DAX30 index rose 17.87 points, or 0.07%, to 24046.01 points; the UK FTSE 100 index fell 21.92 points, or 0.23%, to 9645.09 points; the French CAC40 index fell 6.31 points, or 0.08%, to 8108.43 points; the European Stoxx 50 index rose 0.42 points, or 0.01%, to 5724.35 points; the Spanish IBEX35 index rose 23.70 points, or 0.14%, to report 16712.20 points; Italy's FTSE MIB index rose 0.05 points, or 0.00%, to 43432.82 points.
[Asia Pacific Stock Market] The Nikkei 225 Index rose 0.18%, South Korea's KOSPI Index rose 1.34%, India's BSE SENSEX fell 0.71%, and the Indonesian Composite Index rose 0.90%.
[Foreign Exchange] The US Dollar Index (DXY), which measures a basket against six major currencies, rose 0.11% to 99.10.
[Cryptocurrency] Cryptocurrency is rising. Bitcoin rose 0.69% to $91,019; Ethereum rose 2.36% to $3133.09.
[Precious Metals] COMEX gold futures fell 0.55% to 4219.75 US dollars/ounce. Spot gold fell 0.15% to 4190.76 US dollars/ounce. Spot silver fell 0.25% to $58.15 per ounce.
[Crude oil] WTI crude oil futures for January closed down nearly 2.00% to $58.88 per barrel. Brent crude oil futures for February closed down 1.98% to $62.49 per barrel.
[Metals] LME copper closed up $15 to $11,636 per ton. LME aluminum closed down $10 to $2,88/ton. LME zinc closed up $23 to $3121 per ton. LME lead closed down by $4 to $1998/ton. LME nickel closed down $10 to $14,840 per ton. LME tin closed down $184 to $39,884 per ton. The LME period cobalt closed at $52,220 per ton.
[Macro News]
US President Trump: An executive order with a single rule against artificial intelligence will be issued this week. Trump said in a social media post on Monday local time that a “ONE RULE” (ONE RULE) executive order will be introduced. “If we want to continue leading the way in AI, we must have only one set of rulebook,” he stressed. Trump made it clear that companies should not be forced to obtain separate approval from 50 states every time they do business, implying that the current state-level regulatory system has placed an excessive burden on enterprises. The purpose of this executive order to regulate artificial intelligence is to establish a unified federal regulatory framework and end the current state of separate legislation. This move will directly affect the cost of compliance and the speed of expansion of technology companies in the AI field.
Wall Street's most optimistic predictions have arrived! Oppenheimer: Next year the S&P 500 will rise to 8,100 points. Wall Street's bullish sentiment on US stocks hit a new high, and Oppenheimer (Oppenheimer) gave Wall Street's most aggressive predictions so far. John Stoltzfus, the company's chief investment strategist, predicts that the S&P 500 index will rise further to 8,100 points in 2026, driven by strong corporate profit growth and the resilience of the US economy. This target level means that the S&P 500 index will rise another 18% from current levels, which is currently the most optimistic forecast. The strategist pointed out that optimistic expectations are mainly based on the continued resilience of US economic data and that the performance of S&P 500 companies has exceeded expectations for most of this year. It is expected that corporate profits will increase by 12% next year.
No market expectations dovish! Shadow Federal Reserve Chairman Hassett: We are not responsible for announcing the interest rate path for the next six months. On Monday local time, US White House National Economic Council Director Kevin Hassett said that it would be “irresponsible” for the Federal Reserve to announce the specific path of interest rate policy for the next six months in advance, and emphasized that decisions must be made based on economic data. Hassett is one of the popular candidates to succeed Powell as chairman of the Federal Reserve. Powell's term will end in May next year. When asked how many more interest rate cuts will be needed until 2026, Hassett said, “I'm not willing to answer by 'counting the number of interest rate cuts', but I can say that all you have to do is keep an eye on the data.” According to some analysts, Hassett's latest speech was not dovish. The market's expectations for the Fed's easing action next year have declined. The latest forecast is that interest rates will be cut twice in 2026, which is down from the three interest rate cuts more than a month ago.
New York Federal Reserve: US consumer inflation expectations were stable in November, and the financial situation deteriorated. According to the US New York Federal Reserve's consumer expectations survey, consumer expectations for the next year's inflation rate in November were basically the same as 3.2%, compared to 3.24% the previous month. According to the report, “The reading of anticipated changes in healthcare costs reached the highest value since the data series began to be published in January 2014.” “The average expectation that people are likely to lose their jobs over the next 12 months fell 0.2 percentage points to 13.8%, the lowest since December 2024.” “People's perception of the family's current financial situation has deteriorated significantly compared to a year ago. A higher percentage of respondents said that the family's financial situation is worse than a year ago.” For the coming year, consumers expect gasoline prices to rise 4.09%; food prices to rise 5.87%; medical expenses to rise 10.08%; college education expenses to rise 8.39%; and rents to rise 8.27%. The proportion of consumers unable to pay the minimum payment is expected to increase in the next three months, from 13.1% in October to 13.7%.
Is the 90-year precedent about to be overturned, and the independence of the Federal Reserve is in jeopardy? The US Supreme Court has hinted in support of Trump's dismissal of FTC members. On Monday local time, the US Supreme Court sent a signal that it might reshape the federal power structure, making outsiders even more worried about whether the Federal Reserve, which flaunts that it is not influenced by political factors, can maintain its independence. In oral arguments over Trump's dismissal of Federal Trade Commission (FTC) member Rebecca Kelly Slaughter, the Supreme Court's conservative court majority challenged a 90-year case law protecting independent institutions of the federal government, implying support for the president's control over dozens of traditionally independent federal agencies. Six conservative Supreme Court justices said that the real concern is that Congress has created an agency that exercises executive power but is not responsible to the president. However, one of the conservative justices, Brett Kavanaugh, said he had “concerns” about weakening the independence of the Federal Reserve, implying that the exception clause the court seemed to set for the Federal Reserve in May of this year would be strengthened. This statement failed to completely allay market concerns about the independence of the Federal Reserve. The court will hear Trump's dismissal of Federal Reserve Governor Lisa Cook (Lisa Cook) in January next year on suspicion of mortgage fraud.
Individual stock news
Netflix (NFLX.US) has been cut off! Paramount Sky Dance (PSKY.US) snaps up Warner Bros. Explore (WBD.US). After Trump raised antitrust concerns about Netflix's acquisition of Warner Bros. Exploration, the son of Oracle CEO and Paramount CEO David Ellison (David Ellison), who is close to Trump, bypassed the Warner board of directors and directly initiated a hostile takeover with shareholders. Paramount announced an all-cash takeover offer to acquire all of Warner's issued shares at a cash price of 30 US dollars per share, with a corporate value of 108.4 billion US dollars. Paramount said the proposed deal covers all of Warner's business. Paramount said that compared to Netflix's plan, this offer is more attractive to shareholders and more likely to pass regulatory scrutiny. Paramount said its offer “provided an additional $18 billion in cash compared to the price offered by Netflix.” On December 5, Netflix announced that it had reached an agreement with Warner to acquire the latter's television, film production studio and streaming business, with a total transaction price of US$82.7 billion. At the close of trading on Monday, Warner closed up 4.41%, Paramount closed up more than 9%, and Netflix fell 3.44%.
Breaking the rumor, one of the most important Apple (AAPL.US) executives and chip executives: he won't leave his job in the near future. Johny Srouji, head of Apple's chip business, said on Monday that he will continue to work at Apple. Previously, the market feared that his potential departure might exacerbate the turmoil in Apple's senior management. Srouji is regarded as one of Apple's most important executives. He has always been responsible for the company's hardware technology team, including chip research and development. Srouji led Apple's strategic transformation to self-developed chips and is highly respected in the industry. According to reports, some media reported over the weekend that Srouji had discussed the possibility of leaving Apple, which indicates that he may switch to another technology company. Srouji, Apple's senior vice president of hardware technology, has told CEO Cook that he is seriously considering leaving his job in the near future. The analysis points out that in the context of the recent departure of many Apple executives, which has raised concerns about the stability of senior management of the company, Srouji's statement is particularly important.
IBM (IBM.US) transforms AI and plans to swallow Confluent (CFLT.US) for $11 billion. IBM announced on Monday that it would buy data streaming company Confluent at a price of $31 per share. The statement said that the value of the enterprise, including debt, was 11 billion US dollars. The parties expect the deal to be completed by mid-2026. This is one of IBM's largest acquisitions to date, and a major move to bet on enterprise software in the context of artificial intelligence tools requiring real-time processing of tasks. Confluent provides technology to help manage the real-time data stream required for large-scale AI models rather than transferring data through more bulky batch processing. The AI boom is driving a surge in demand for its technology in retail, technology, and financial services industries. According to the accompanying regulatory filings, IBM will pay Confluent a $453.6 million break-up fee if the deal fails or is terminated. Analysts said the acquisition “could significantly improve IBM's AI product portfolio and further boost sales growth in its software division.” At Monday's close, Confluent surged more than 29%, while IBM rose slightly by 0.40%.