A ceasefire fire deal reached in Israel-Lebanon war

General market commentary

Wall Street extended its winning streak to seven sessions, with major indices achieving record highs despite lingering tariff concerns. Hopes for a Federal Reserve rate cut and a rebound in mega-cap equities such as Apple, Microsoft, and Meta Platforms supported the rally. The Nasdaq Composite led the gains, while the S&P 500 surpassed the 6,000 mark for the first time in nearly two weeks. Inflation worries remained subdued ahead of today’s key Personal Consumption Expenditure (PCE) price index, with dovish signals from Federal Reserve minutes easing shorter-term bond yields even as the 10-year Treasury yield edged higher.

The session revealed mixed market dynamics, with mega-cap shares masking broader softness as two-thirds of NYSE-listed equities declined. Trade-sensitive sectors, including materials and energy, faced headwinds from President-elect Trump’s proposed tariff hikes on Canada, Mexico, and China, although legal hurdles under the US-Mexico-Canada Agreement (USMCA) may complicate the measures for North American trade. Utilities and technology shares outperformed, buoyed by their defensive appeal amid uncertainty. In global markets, European equities slipped as investors weighed potential global fallout from higher U.S. tariffs, while the U.S. dollar strengthened and oil prices dipped following news of a ceasefire between Israel and Lebanon.

Latest market update

U.S. equity futures were steady ahead of Wednesday’s open as investors awaited the PCE price index, a key inflation gauge likely to influence Federal Reserve interest rate decisions. Technology shares showed resilience amid tariff concerns, while trading volumes are expected to ease later in the week due to the Thanksgiving holiday.

Asian equities were broadly subdued as concerns over potential tariffs from incoming U.S. President Donald Trump weighed on sentiment, with Japan’s Nikkei falling 0.9%, dragged down by auto shares and a stronger yen. While Chinese blue chips and Taiwanese equities slipped, South Korea’s KOSPI and Hong Kong’s Hang Seng showed modest gains, reflecting mixed performance across the region.

The Euro Stoxx 50 fell 0.8% to 4,762, driven by global trade concerns after President-elect Trump’s renewed tariff threats targeting China, Mexico, and Canada. Losses were led by Stellantis, down nearly 5%, due to its heavy reliance on Mexican manufacturing, with other major laggards including BBVA, ENI, and Anheuser-Busch.

The US dollar held steady against major currencies on Wednesday, with little change against the euro, which remained near $1.0493. Despite recent fluctuations due to President-elect Trump's tariff promises and other factors, the dollar has seen turbulence, including a dip after his Treasury secretary nomination.

Oil prices edged lower as a ceasefire between Israel and Hezbollah eased concerns over Middle Eastern supply disruptions, though losses were limited by data showing a substantial draw in U.S. oil inventories. Additional support came from speculation that OPEC+ may delay planned production increases at its upcoming meeting.

Equities on the move

The following companies experienced moves in their share price driven by analyst ratings, quarterly earnings, or other news:

Dell's shares dropped over 11% in after-hours trading after it forecast weaker-than-expected fourth-quarter revenue, citing soft demand for PCs and cautious enterprise IT spending, despite strong sales of AI servers. Third-quarter revenue missed estimates, with growth in its AI-focused infrastructure solutions unit offset by a decline in its PC business.

HP forecast first-quarter profit below Wall Street expectations, citing ongoing weak demand in the PC market and increased competition, which caused its shares to drop 7.5%. Despite a 1.7% revenue rise in the fourth quarter, the company faces challenges in the traditional PC sector and anticipates further margin pressures in the coming months.

CrowdStrike Holdings reported stronger-than-expected third-quarter earnings, with revenue rising 29% to $1.01 billion and a profit per share of 93 cents, surpassing estimates. The company also achieved a milestone of over $4 billion in annual recurring revenue, driven by increased cybersecurity investments amid growing online threats and AI-driven cyberattacks. Still shares dropped by 5.8% in after-hours trading.

Abercrombie & Fitch reported better-than-expected Q3 results, with earnings per share of $2.50 and revenue of $1.2 billion, driven by strong sales growth in both its Abercrombie and Hollister brands. Despite raising its full-year sales and margin outlook, the retailer's shares fell 5.1% in regular trading.

Amgen plummeted more than 4% even though its Phase 2 study data for an experimental weight-loss drug was positive. Participants lost an average of 20% of their body weight after a year at the highest dose, but the data didn't show the drug working better than Eli Lilly's weight-loss blockbuster Zepbound, Barron's noted. Shares of Eli Lilly bounced 4.5%.

Banco BPM rejected UniCredit's €10 billion takeover bid, arguing it undervalued the bank, tied its hands in strategic deals, and exposed shareholders to risks from UniCredit’s German expansion plans. The offer, which included a minimal 0.5% premium, also hindered BPM’s planned acquisition of Anima Holding and sparked concerns over UniCredit’s broader consolidation strategy in Italy.

HSBC downgraded Goldman Sachs and Morgan Stanley to "hold" from "buy," citing limited upside potential after significant equity rallies, despite raising price targets and increasing earnings estimates. While optimistic about their long-term fundamentals, HSBC warned that the recent gains have elevated expectations, leaving less attractive risk-reward profiles.

Bernstein rated Royal Caribbean "Outperform" due to its strong recovery and financial performance, while giving Carnival a "Market-Perform" rating, citing weaker returns and slower recovery. The firm forecasts a 23% upside for Royal Caribbean, driven by investments in larger ships and private destinations.

Citi upgraded Chevron to "buy" from "neutral," citing a valuation gap with Exxon and growth potential from exploration in Namibia and the upcoming resolution of the Hess arbitration. The firm raised its price target to $185, highlighting Chevron’s attractive investment opportunity due to its discounted valuation and long-term growth prospects.

Upcoming data and events

Today's focus will be on key economic releases, including the PCE price index, personal income and spending, and the latest third-quarter GDP estimate, with inflation data likely to influence Federal Reserve policy expectations.

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