Markets lifted by renewed risk appetite

General market commentary

US equities closed higher on Tuesday, with gains led by the technology, industrials and communication services sectors amid lighter than usual trading volumes. The Nasdaq Composite rose 0.6%, the Dow Jones Industrial Average added 0.4%, and the S&P 500 advanced 0.3%. Technology shares were buoyed by upbeat earnings from mid-cap names MongoDB and Credo Technologies, while Boeing jumped around 10% after signalling stronger aircraft deliveries and improved free cash flow prospects for 2026. Cryptocurrencies also supported broader risk appetite, with Bitcoin up 6% and Ether up 7.3% on the day. Bond markets were steady, with the US 10-year Treasury yield closing near 4.1%, while the 2-year ended around 3.51%.

The day was light on new economic data, though investors looked ahead to a busy week featuring the ADP employment report, ISM Services PMI and delayed PCE inflation figures. Markets continued to price in a high likelihood of another 25 bp Federal Reserve rate cut at the 10 December meeting. Elsewhere, Asian markets were little changed and European equities were mixed after eurozone inflation rose 2.2% year on year, slightly above expectations. Additional support for sentiment came from stronger US consumer indicators, including improved holiday season sales and a rise in the RealClearMarkets sentiment index, although inflation, tariffs and high interest rates remain headwinds. Overall, Tuesday’s session reflected steady risk appetite ahead of key macro releases later in the week.

Latest market and economic update

Asian markets were mixed, with Japan’s Nikkei rising 1.13% on tech and real estate gains, while the Topix edged lower. South Korea’s Kospi advanced 1.06%, supported by revised Q3 GDP growth of 1.8% year-on-year. Australia’s S&P/ASX 200 rose slightly despite Q3 GDP missing estimates, while Hong Kong’s Hang Seng opened lower and China’s CSI 300 remained flat.

US equity futures held steady on Wednesday as investor sentiment was lifted by a Bitcoin rebound and year-end rally prospects. In after-hours trading, Marvell Technology rose nearly 10% on strong Q3 results, while American Eagle Outfitters surged 10% on robust holiday sales expectations. Markets are also eyeing the ADP employment report for November.

European equities rose on Tuesday, with the STOXX 50 up 0.5% to 5,690 and the STOXX 600 slightly higher at 576, supported by gains in banks including BNP Paribas and ING. Santander climbed 1.5% after selling a Polish subsidiary, while Bayer surged over 12% on a US Supreme Court move over Roundup-related lawsuits, despite eurozone inflation reaching 2.2%.

The US dollar weakened on Wednesday, with the dollar index near 99.2 and the euro trading around 1.1637 as expectations of further Federal Reserve rate cuts weighed on the currency. Risk-on sentiment from a rebound in equities and cryptocurrencies added pressure, while markets awaited the ADP employment report for fresh labour-market insight.

Oil prices slipped in Asian trading on Wednesday, with Brent down 0.3% to $62.24 and WTI falling 0.3% to $58.44, following Tuesday’s losses. Markets weighed the inconclusive US-Russia talks on Ukraine, ongoing Ukrainian attacks on Russian energy infrastructure, and a 2.48 million-barrel draw in US crude stocks, keeping geopolitical and supply concerns in focus ahead of official EIA data.

China’s services sector grew at its slowest pace in five months in November, with the Services PMI slipping to 52.1. New orders softened, employment fell for the fourth month, and cost pressures persisted, though export demand improved slightly. Overall business confidence and output growth also eased, reflecting continued economic slowdown and muted domestic momentum.

US consumers spent a record $44.2 billion online over Thanksgiving weekend, with $14.25 billion on Cyber Monday, according to Adobe Analytics. Shoppers were highly engaged, averaging $337.86 each. In-store visits rose 3%, and retailers like Amazon, Walmart, and Target offered strong discounts. Many used AI tools to compare prices and make informed holiday purchases.

Equities on the move

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

CrowdStrike forecast fourth-quarter revenue of $1.29–$1.30 billion, above analysts’ estimates of $1.22 billion, and raised its full-year outlook to $4.80–$4.81 billion. The cybersecurity firm, benefiting from growing AI adoption across its Falcon platform, saw third-quarter revenue rise 22% to $1.23 billion. Shares rose 3% in after-hours trading.

Marvell Technology announced it will acquire semiconductor startup Celestial AI for $3.25 billion in a cash-and-share deal, aiming to enhance its networking products amid competition from Broadcom and Nvidia. The deal provides Celestial AI with $1 billion in cash and 27.2 million Marvell shares. Shares of Marvell rose over 8% in after-hours trading.

Boeing’s CFO Jay Malave said the company’s recovery is “in full force,” with plans to complete the Spirit AeroSystems acquisition this year. Deliveries for the 737 and 787 are expected to rise in 2026, alongside 737 MAX 10 certification. Boeing anticipates modest positive free cash flow next year, while the defence division maintains strong margins, boosting market optimism.

Amazon Web Services will adopt Nvidia’s NVLink Fusion in future Trainium4 AI chips, improving server communication for faster model training. At its Las Vegas conference, AWS also launched Trainium3 servers with four times previous computing power, upgraded Nova AI models, and Nova Forge for custom model creation, enhancing its AI infrastructure offerings.

The Bank of England cut its Tier 1 capital requirement from 14% to 13%, its first reduction since the 2008 financial crisis, aiming to boost lending and stimulate growth. HSBC, Barclays, Lloyds and NatWest shares rose. The BoE also launched reviews on buffer usability and the leverage ratio, urging banks to use freed funds to lend rather than reward shareholders.

BofA forecasts further US dollar weakness in 2026, driven chiefly by an increasingly dovish Federal Reserve and growing fiscal pressures. Analysts argue that even if short-term events spark temporary strength, the broader trajectory remains negative, with softer monetary policy and heightened risk premia expected to erode the greenback’s appeal through the year.

Bilfinger raised its mid-term financial targets, aiming for 8–10% revenue CAGR through 2030, with 4–6% organic growth, and an EBITA margin of 8–9%. Free cash-flow conversion is now expected above 90%. The company anticipates €6.9 billion in revenue and €586 million EBITA organically by 2030, rising to €8.3 billion including acquisitions.

JPMorgan expects European banks to extend outperformance into 2026, supported by stable macro conditions, strong capital generation, and attractive valuations. Analysts highlight solid GDP growth, low volatility, and ECB stability, with 5.5% pre-provision profit and 9.7% earnings growth. Top picks include Barclays, NatWest, Deutsche Bank, Société Générale, Caixabank, and Standard Chartered.

Morgan Stanley downgraded Vinci to Equal-weight, citing slowing growth at Vinci Energies, Cobra IS and Airports, which no longer justify a premium valuation. Traffic and revenue gains are moderating, capital spending is rising, and M&A faces competition. Earnings momentum is muted, free cash flow constrained, and valuation appears less attractive versus peers.

Barclays initiated coverage of Cloudflare with an Overweight rating and a $235 target, citing its unified global network and expanding product stack. With four key “Acts” driving growth, including application performance, SASE security, edge compute and AI-driven offerings, Cloudflare aims for $3 billion revenue by 2026. Barclays sees 27 to 30 percent CAGR and strong margin potential.

KeyBanc upgraded T-Mobile to Sector Weight, citing overly negative investor sentiment despite structural and cyclical challenges. Shares fell 12.5% since July, underperforming the S&P 500. Analyst Brandon Nispel expects organic EBITDA growth above 7% in 2026–2027, driven by 2025 investments, while cautioning that execution risks and long-term structural issues persist.

Upcoming data and events

Today’s key US economic releases include the ADP employment change for November, the ISM Services PMI with sub-indexes, September import and export prices, and EIA data on crude, gasoline, distillate, and heating oil stocks. Major earnings reports include Salesforce, Snowflake, Dollar Tree, and Inditex.

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