US equities extend gains to fourth day

General market commentary

US equity markets moved higher on Monday as investors looked ahead to a heavy week of corporate earnings and a Federal Reserve policy decision. The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all extended their recent rallies, with most sectors finishing in positive territory, led by communication services. Consumer discretionary was the main laggard. Elsewhere markets were mixed in Asia and mostly higher in Europe. Bond yields edged lower, while a softer US dollar and rising gold and silver prices reflected lingering uncertainty around trade policy and global currency developments.

Tariff headlines involving the US and Canada had little direct impact on equities, but they contributed to stronger demand for perceived safe assets. Attention is now firmly on earnings, with several large technology and industrial companies due to report this week. Early results have been supportive, reinforcing optimism around profit growth despite elevated valuations. Overall, market performance suggests investors remain willing to look through geopolitical noise, focusing instead on earnings momentum and guidance for the months ahead.

Latest market and economic update

Asian equity markets traded higher on Tuesday, supported by optimism ahead of major US technology earnings and a steady Federal Reserve outlook. South Korean equities led gains, rebounding sharply despite tariff concerns. Japanese, Chinese, Hong Kong and Australian markets also advanced, helped by technology shares and improving regional sentiment.

US equity futures were mixed after hours, with Dow futures edging lower after a Trump administration proposal for near flat Medicare Advantage payments hit health care shares. S&P 500 futures were little changed, while Nasdaq futures rose slightly. Investors remained cautious ahead of the Federal Reserve decision and major technology earnings later this week.

European equities edged higher on Monday, with the STOXX 50 rising 0.2% to 5,959 and the STOXX 600 up 0.3% to 610. Gains in banks and utility providers lifted the market, while losses in the defence sector, led by Rheinmetall, highlighted caution. Investors continued to weigh trade tensions and Eurozone borrowing cost concerns.

The US dollar hovered around 97, near its weakest level in over four months, as the Federal Reserve meeting began. The euro strengthened to 1.1874 amid political uncertainty, potential government shutdown fears, and speculation over a new Fed chair. Geopolitical and trade tensions, along with possible US-Japan currency intervention, further weighed on the dollar.

Oil prices slipped in Asian trading as markets weighed US–Iran tensions against mixed supply signals. Recent gains driven by geopolitical risks and US winter disruptions were offset by Kazakhstan’s plan to resume output at the Tengiz field. Traders remain focused on whether prolonged US weather impacts will meaningfully tighten global crude supplies.

US durable goods orders jumped 5.3% in November 2025, rebounding from October’s 2.1% decline and exceeding forecasts. The rise was led by transportation equipment, including a 97.6% surge in civilian aircraft bookings. Orders for electrical equipment, machinery, and metal products also grew, while core business spending, excluding defence and aircraft, increased moderately.

China posted its first annual increase in industrial profits in four years in 2025, supported by government efforts to curb price wars and a rebound in exports. Full year profits rose 0.6%, with December showing strong growth. Export diversification helped offset weak domestic demand, while state owned firms underperformed private and foreign peers.

President Trump announced a tariff increase on South Korean autos, lumber, pharma, and other goods from 15% to 25%, citing Seoul’s delay in passing last year’s trade deal. The move surprised South Korea, briefly weighed on the KOSPI and won, and threatens automakers like Hyundai and Kia, while raising concerns over currency stability and ongoing trade uncertainty.

Equities on the move

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

Nvidia has invested $2 billion in CoreWeave to expand their AI infrastructure partnership, targeting over 5 gigawatts of AI factories by 2030. The collaboration involves deploying Nvidia technology, validating CoreWeave’s AI-native software, and aligning engineering efforts, highlighting confidence in CoreWeave’s business model and long-term growth potential.

Chinese sportswear group Anta Sports agreed to buy a 29% stake in German rival Puma from France’s Pinault family for about €1.5 billion. The deal values the equities at a 61% premium and is seen as a lifeline for Puma, which has faced weakening sales. Anta plans to support the brand while preserving its heritage.

Microsoft received local approval to build 15 additional data centres near its existing site in Mount Pleasant, Wisconsin, expanding its computing capacity to support artificial intelligence growth. The project will use land originally set aside for a Foxconn plant and is expected to make Microsoft the area’s largest employer, with developments valued above $13 billion.

Salesforce unit Computable Insights secured a nine-year, $5.64 billion contract with the US Army to provide Salesforce products and outcome-based services, running until June 2035. The Department of War did not disclose further details. Computable Insights, which handles government contracts for Salesforce, previously won a $100 million Army contract in 2025.

Nike is investigating a potential data breach after ransomware group World Leaks claimed to have leaked 1.4 terabytes of company data. The sportswear giant, facing market share losses, has not confirmed details or ransom payment. It remains unclear if wholesale partners were affected, amid rising corporate losses from cyber attacks in recent years.

Baker Hughes sees significant revenue potential in Venezuela’s oil sector following political change. The company is taking a cautious, long-term approach, emphasising safety and regulatory clarity. Major investments in oilfield services, industrial and energy technology are expected, while the firm forecasts slightly lower 2026 revenue, despite ongoing opportunities in the market.

Rheinmetall Group is in discussions with OHB SE regarding potential collaboration in public procurement processes, likely linked to space and defence contracts. OHB confirmed the talks but provided no details on the exact projects, scope, or timeline. The announcement drove OHB shares up 27% to a record high, reflecting strong investor optimism.

Some LVMH shareholders are pressing for clarity on Bernard Arnault’s succession, citing the lack of transparency as a growing governance risk. At 76, Arnault has yet to choose a successor among his five children. Investors warn the uncertainty could weigh on the company’s shares, while LVMH maintains that succession plans exist but remain private.

GameStop shares rose up to 8.8% on Monday before settling 5% higher after investor Michael Burry revealed he has been buying the video game retailer. Burry cited strong cash flow, $1.2 billion in net operating losses, and confidence in Chairman Ryan Cohen, highlighting potential long-term growth catalysts, including acquisitions or Bitcoin purchases.

Yardeni Research has reaffirmed its bullish outlook on gold, saying rising geopolitical tensions, higher defence spending and the global AI arms race are driving a sustained metals melt-up. The firm is targeting gold at $6,000 by the end of this year and $10,000 by the end of 2029, arguing demand will remain structurally strong amid global uncertainty.

Redburn Atlantic upgraded Meta Platforms to Buy, raising its price target to $900, citing long-term earnings potential despite investor concerns over rising AI costs. While near-term expenses and capex may pressure FY26 EPS, Meta’s AI investments, including agentic tools and AI-driven video, are expected to drive growth, maintain strong returns, and expand advertising opportunities.

Needham & Company upgraded AppLovin to Buy, raising its price target to $700, citing stronger-than-expected e-commerce revenue growth for 2026. The firm now forecasts $1.45 billion, up from $1.05 billion, driven by sequential first-quarter gains, new brand adoption, and industry tailwinds. Analysts see potential upside if growth mirrors TikTok’s trajectory.

Evercore ISI upgraded Cisco to Outperform, raising its price target to $100, citing multi-year high single-digit sales and low-teens EPS growth. Drivers include enterprise networking upgrades, legacy hardware phase-out, rising AI demand, new products like P200, and recovering enterprise and telecom markets. Cisco is expected to generate ~$3 billion in AI revenue by FY26.

Jefferies upgraded Hermès to Buy, raising its price target to €2,400, citing strong exposure to high-spending luxury consumers and superior margins. The company’s ultra-luxury positioning, particularly in China, supports growth amid volatile sector demand. Forecasts include 40% EBIT margins, €6.8 billion EBIT in 2026, and EPS rising to €52.12 in 2027, implying 14% upside.

RBC Capital Markets downgraded Shell to “sector perform” from “outperform,” cutting its price target to 3,200p from 3,600p due to challenges in chemicals, international gas, and trading, alongside portfolio and balance sheet pressures. Free cash flow growth is supported by restructuring, but headwinds and a tougher operating environment limit valuation expansion.

Upcoming data and events

Tuesday’s market focus includes a speech from U.S. President Trump and the release of the Conference Board Consumer Confidence report. Earnings season continues with major results expected from UnitedHealth Group, NextEra Energy, Texas Instruments, Boeing, and Raytheon Technologies

This information is provided solely for educational and informational purposes and should not be construed as investment advice, advice on specific investments or investment decisions, tax advice, legal advice, or any other form of professional or regulatory advice. The information does not take into account your personal circumstances and is provided to you on the express understanding that it does not constitute advice and should not be relied upon in making any investment decision. Investing in financial instruments involves risk. You should conduct your own research before making any investment decisions and seek the assistance of a licensed financial advisor if you are unsure. No person should act on any opinion or information contained in this document without first obtaining appropriate professional advice. Calamatta Cuschieri Investment Services Limited does not accept liability for any actions, proceedings, costs, demands, expenses, damages, or losses suffered as a result of reliance on the information herein.