U.S. Markets Stabilize Amid Manufacturing Weakness, Rate-Cut Expectations, and Geopolitical Pressures

Index Update:  U.S. manufacturing contracted for a ninth straight month in November, with tariffs weighing on activity, keeping attention on upcoming data such as the delayed PCE Price Index. Markets remain focused on the December 9–10 Fed meeting, where an over 85% probability is priced in for a 25 bps rate cut, while speculation over a potential leadership change grew after President Trump suggested he had chosen a successor to Chair Powell, with Kevin Hassett seen as the frontrunner. In corporate news, Strategy fell 3.3% after raising USD 1.44 billion to fund dividends and service debt, while major retailers like Walmart advanced as holiday shopping activity picked up.

Market Movers:  On Monday, the top gainers were Fly-E Group, Inc. (+252.46%), followed by Ambitions Enterprise Management Co. L.L.C (+198.13%). On the Columbus Circle Capital Corp I (-43.15%), and SMX (Security Matters) Public Limited Company (-36.12%) declined the most the same day.

Commodities Update:  Oil prices inched higher on Tuesday, with WTI near $59.4 and Brent around $63.2 per barrel, supported by escalating geopolitical risks and OPEC+’s decision to keep production unchanged in early 2026. Supply concerns intensified after Ukrainian attacks disrupted the Caspian Pipeline Consortium, while U.S.–Venezuela tensions further lifted risk premiums. In precious metals, gold fell about 1% below $4,200 per ounce and silver dropped over 1% to $57 as investors booked profits following strong rallies. Despite the pullback, expectations of a U.S. rate cut next week remain firm, with markets pricing in an 88% chance of a 25 bps reduction amid weak U.S. manufacturing data and dovish Fed signals. Focus now turns to upcoming ADP employment data, the delayed PCE report, and comments from Fed Chair Powell.

Macro Updates:  The U.S. Logistics Manager’s Index slipped to 55.7 in November 2025, marking the slowest sector growth since mid-2024 as weakening inventory and warehousing trends weighed on overall activity. Warehousing utilization fell into contraction for the first time in the index’s history amid a drawdown of previously elevated inventories, leading to higher capacity and softer pricing. Inventory levels returned to slight expansion while costs eased. In contrast, transportation continued to strengthen, with tighter capacity and slower utilization pushing transportation prices higher.

Bonds Commentary:  The U.S. 10-year Treasury yield steadied at 4.09% on Tuesday after a sharp rise driven by concerns that the Bank of Japan may hike rates, potentially reducing Japanese demand for foreign bonds. Additional upward pressure came from a surge in new corporate debt issuance. Meanwhile, deeper U.S. manufacturing weakness kept expectations high for a 25 bps Fed rate cut, with markets assigning an 88% probability. Investors now turn to the upcoming ADP report and delayed PCE data for further clues on the rate outlook.

Futures Update:  U.S. stock futures edged lower early Tuesday, following a soft start to December marked by a Bitcoin pullback, rising Treasury yields, and weak U.S. economic data. Futures for the Dow, S&P 500, and Nasdaq 100 were all down about 0.2% as sentiment remained cautious. Markets were weighed by ISM data showing U.S. manufacturing contracted for a ninth consecutive month in November, reflecting ongoing tariff-related pressures. Despite the slowdown, expectations for a Federal Reserve rate cut remain firm, with an 85% probability of a 25 bps reduction at the December 9–10 meeting.

After facing selling pressure early in the session, stocks attempted a recovery during midday trading on Monday but ultimately retreated as the day went on. The S&P 500 declined by 36.46 points, or 0.53%, closing at 6812.12. From a technical perspective, the index held support at important levels and gradually moved higher. It also remains above its key moving averages, indicating a bullish trend. The 14-day Relative Strength Index (RSI) is bouncing back from oversold conditions, supporting a positive outlook. Key support levels are around 6,690, with resistance expected near 6,890.