Markets kick off final week of 2025

On Friday, U.S. equity markets were largely unchanged amid subdued trading following the Christmas break. The S&P 500 closed just below Wednesday's record high, the Nasdaq Composite eased 0.1% to 23,593.1 and the Russell 2000 small-cap index fell 0.5%. The Dow Jones Industrial Average finished at 48,711 while the S&P 500 ended at 6,929.9, showing little movement. Consumer discretionary shares led the declining sectors, whereas materials posted the strongest gains. Overall, the S&P 500 gained 1.4% for the shortened trading week, with the Dow and Nasdaq both rising 1.2%.

Gold and silver shares extended their rallies to record levels, with gold last up 1.3% at $4,559.60 per ounce and silver rising 10% to $78.92 per ounce. U.S. Treasury yields were mixed with the ten-year note steady at 4.14% and the two-year down 2.1 basis points to 3.49%. West Texas Intermediate crude oil fell 2.5% to $56.91 per barrel. In company news, Nvidia shares rose 1% following a licensing deal with AI chip startup Groq, Coupang shares jumped 6.5% after resolving a data leak investigation, and Johnson & Johnson shares eased 0.1% after terminating a mid-stage drug trial.

Latest market and economic update

• Asian markets were mostly rangebound this morning amid thin year-end trading. South Korea outperformed as the KOSPI jumped on strong tech gains, while Japan dipped slightly. China and Hong Kong edged higher, India was flat and Australia slipped, supported by expectations of easier US monetary policy.

• US equity index futures were steady ahead of a holiday-shortened week, with thin volumes expected. Wall Street closed last week at record highs, led by a tech rebound. Investor sentiment remains supported by hopes of future Federal Reserve rate cuts and continued ‘Santa Claus rally’ optimism.

• The US dollar hovered near 12-week lows in thin year-end trading, pressured by expectations of Federal Reserve rate cuts in 2026 and declining Treasury yields. The euro edged lower against the dollar, reflecting muted market activity and holiday-thinned volumes, as investors weighed global economic data and the outlook for monetary policy in both the US and Europe.

• Oil prices rebounded in Asian trade on Monday after steep Friday losses, as stalled US-led Ukraine peace talks dampened hopes of a swift end to the war. Gains were capped by concerns over a potential 2026 supply surplus, although tightening Venezuelan crude exports and ongoing geopolitical uncertainty offered some support.

• Ukrainian President Zelenskiy met U.S. President Trump at Mar-a-Lago to discuss ending the war, focusing on Donbas, Zaporizhzhia and security guarantees. The meeting followed a Trump-Putin call, during which Putin warned a 60-day EU ceasefire could prolong conflict and urged Kyiv to decide quickly on Donbas. Key territory issues remain unresolved under a 20-point plan.

• China’s finance ministry said fiscal policies will be more proactive in 2026, focusing on boosting domestic demand, technological innovation, and social welfare. The government plans to expand investment, support new growth engines, improve healthcare and education, promote urban-rural integration, and pursue greener development, aiming to sustain around 5% economic growth.

Equities on the move

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

• Warner Bros. Discovery faces potential legal action from Paramount Skydance, which may abandon its all-cash bid. Sources allege the board favoured Netflix’s cash-equity offer, possibly due to a personal relationship between Warner Bros. Discovery CEO David Zaslav and Netflix CEO Ted Sarandos. Paramount Skydance is reportedly considering litigation over the bidding process.

• Amazon has abandoned its plans for drone deliveries in Italy, citing broader regulatory and business challenges despite progress with aerospace authorities. The Italian civil aviation body called the decision unexpected, linking it to recent financial developments within Amazon. Initial drone tests in San Salvo had been successfully completed in December 2024.

• Target is attracting activist investor Toms Capital Investment Management, which has acquired a significant stake in the retailer. The move comes as Target faces a prolonged sales slump and underperformance relative to the retail sector, with 12 consecutive quarters of weak growth. Toms Capital has previously pushed for strategic changes in major companies.

• Nvidia has licensed AI chip technology from startup Groq and hired its founder and key engineers, while Groq remains independent. The non-exclusive deal strengthens Nvidia in inference, a more competitive segment than training. Groq, valued at $6.9 billion, uses SRAM for faster AI interactions, rivalled by Cerebras Systems, which plans a 2026 IPO.

• Samsung Electronics will begin mass production of next-generation HBM4 memory chips in February at its Pyeongtaek campus. SK Hynix, also producing HBM4 at its M16 fab, will supply Nvidia’s AI processors. Analysts remain bullish on Samsung’s memory business, forecasting profits could grow 310% in 2026, approaching the W100tr profit mark.

• Jefferies maintained a Buy rating and EUR100 price target on Sanofi despite FDA concerns over tolebrutinib, citing potential negative sentiment and regulatory read-across to Roche’s BTK inhibitor. Novartis’ remibrutinob could benefit competitively, but Jefferies remains positive on Sanofi shares, keeping its outlook and recommendation unchanged.

• UBS maintained a Neutral rating and $62 target on Nike, citing strong brand recovery and improved product accessibility under CEO Elliott Hill. Despite positive survey results and better-than-expected Q2 earnings, Nike faces regional challenges, revenue declines, and inventory issues. Analysts’ targets vary, reflecting cautious optimism amid ongoing headwinds, especially in China.

• Clear Street rated Nasdaq, Coinbase, and S&P Global as top 2026 buys, citing AI-driven innovation, tokenisation, regulatory technology demand, and recovering capital markets. Nasdaq benefits from IPO recovery and dividend growth, Coinbase from blockchain adoption, and S&P Global from rate cuts and issuance growth. Morgan Stanley also upgraded Nasdaq, raising its price target to $110.

Upcoming data and events

Today’s key economic releases in the U.S. include Pending Home Sales, and EIA Crude Oil Inventories. Additional reports cover Cushing oil stocks, distillate and gasoline production, refinery activity, natural gas storage, the Dallas Fed manufacturing index, and 3- and 6-month Treasury bill auctions.