In the United States, Wall Street opened December on a weaker footing, with the S&P 500 declining 0.7% and the Nasdaq falling 1%, following a turbulent November. Investor caution prevailed ahead of several key economic releases, including the delayed September PCE report, and in the run-up to next week’s FOMC interest rate decision. On Tuesday, US equities moved higher, with the S&P 500 up 0.2% and the Nasdaq advancing 0.3%, as markets attempted to recover from Monday’s losses. The risk-off tone that characterised the previous session eased, partly supported by a rebound in the Japanese bond market. Nvidia gained nearly 3%, Oracle rose 3.9%, and Palantir Technologies advanced more than 3%. Gains were also seen among mega-cap stocks, including Microsoft (0.4%), Apple (0.5%), Alphabet (0.4%), Amazon (0.3%), Meta (0.2%), Broadcom (1.4%), and Tesla (0.4%). On Wednesday, US stocks traded cautiously, with the S&P 500 edging down 0.1% and the Nasdaq declining 0.5%. The market was pressured by falls in major technology names and renewed concerns about stretched AI valuations. Later in the session, indices regained some ground as investors positioned for an improved corporate environment on expectations of an upcoming Federal Reserve rate cut, although AI-related valuations remained under scrutiny. By Thursday, US stocks were higher again, with the S&P 500 and the Nasdaq both up 0.2%. Meta shares rose nearly 4% following a report that executives are considering budget cuts of up to 30% for the metaverse division next year. Meanwhile, traders continued to price in another interest rate cut from the Federal Reserve next week. US stocks closed higher on Friday, with the S&P 500 up 0.2% and the Nasdaq up 0.4%, after data strengthened expectations of another Fed rate cut next week. The PCE price index rose by 0.3% month-on-month in September, matching August’s increase and aligning with forecasts. For the week, the S&P 500 and NASDAQ closed up 0.84% and 1.87%, respectively.
In Europe, The STOXX50 fell 0.3% and the STOXX600 declined 0.4% on the first trading day of December, as markets began the month cautiously after a volatile November that delivered only modest gains. European equities were expected to open flat on Tuesday as investors awaited economic data from Europe and the US, including Euro Area inflation and unemployment figures. Stocks later closed modestly higher, as markets assessed the global interest rate outlook. On Wednesday, European stocks ended mixed amid corporate updates and diverging views on monetary policy between the Federal Reserve and the ECB. The STOXX50 and STOXX600 both rose 0.1%, while ECB President Christine Lagarde said inflation is expected to stay close to target. European shares were set to open higher on Thursday after weaker-than-expected US employment data reinforced expectations of a Federal Reserve rate cut next week. Solid business activity data supported sentiment in Europe, although ECB officials maintained a hawkish tone. Investors awaited construction PMI data and Eurozone retail sales. Softer US labour-market data boosted expectations of another 25 bps Fed rate cut, lifting risk appetite. STMicroelectronics jumped more than 4% and ASML gained 1.1%, as chip and technology stocks were supported by reports that China’s Cambricon Technologies intends to more than triple AI chip production in 2026. European stocks edged higher, marking a second consecutive week of gains, as markets continued to evaluate next year’s rate outlook, returns on rising AI capital expenditure, and the prospects for a Russia-Ukraine ceasefire. For the week, the EuroStoxx50 and STOXX600 closed slightly higher, up 1.26% and 0.79%, respectively.
In the UK, London’s FTSE 100 fell around 0.2% on the first trading day of December, as investors turned cautious after four straight gains at the end of November. The index then rose 0.2% on Tuesday, its highest level since mid-November, led by UK banks after the 2025 Bank Capital Stress Test confirmed the sector was in “robust health.” The FTSE 100 slipped 0.1% on Wednesday, with losses in major constituents such as AstraZeneca, Banking stocks and British American Tobacco weighing on performance. It later closed slightly lower, marking a third successive modest decline, driven mainly by weakness in retailers and financials. The FTSE 100 briefly moved into positive territory on Thursday, but surrendered early gains to close around 0.5% lower on Friday, its lowest level in over a week and underperforming its European peers. For the week, the FTSE 100 closed down 0.26% lower.
