U.S. Markets Steady Near Record Highs as Economic Strength Offsets Policy and Geopolitical Risks

Index Update:  U.S. equities were set to open modestly higher, with the S&P 500 poised to extend record levels and the Dow and Nasdaq 100 also edging up, supported by stronger-than-expected third-quarter GDP growth of 4.3%. Robust consumer spending eased concerns around tariff-related inflation, while major technology stocks largely held recent gains despite valuation worries. Intel lagged, set to drop over 3% on reports that Nvidia halted a chip-related test using its equipment, and markets were preparing for a Christmas holiday closure on Thursday.

Market Movers:  On Tuesday, the top gainers were Aimei Health Technology Co., Ltd  (+37.49%), followed Sable Offshore Corp. (+36.32%). On the contrary, Starfighters Space, Inc. (-58.92%), and Momentus Inc. (-32.78%) declined the most the same day.

Commodities Update:  Oil prices rose for a sixth consecutive session on Wednesday, with WTI crude climbing to around USD 58.6 per barrel and Brent crude to about USD 62.5 per barrel, both reaching two-week highs amid heightened geopolitical tensions. Support came from U.S. actions targeting Venezuelan oil shipments and renewed attacks on energy infrastructure linked to the Ukraine–Russia conflict, despite data showing rising U.S. crude and fuel inventories. However, oil remains on track for an annual decline of over 18%, as global supply is expected to exceed demand in the coming year. Gold and silver extended their rallies on Wednesday, driven by expectations of Federal Reserve rate cuts and heightened geopolitical tensions. Gold surged past USD 4,500 per ounce to a new record, supported by safe-haven demand, central bank buying, and fund inflows, putting it up about 70% year to date and on track for its strongest annual gain since 1979. Silver climbed above USD 72 per ounce to a fresh high, rising for a fourth straight session and gaining roughly 149% year to date, underpinned by easing policy expectations, geopolitical risks, a structural supply deficit, and strong industrial demand.

Macro Updates:  U.S. initial jobless claims fell by 10,000 to 214,000 in the week ending December 20, well below expectations and marking one of the lowest readings of the year, signaling continued labor market resilience. However, continuing claims rose for a second week to 1.92 million, reinforcing the view of a steady labor market characterized by low hiring and low layoffs.

Bonds Commentary:  The 10-year U.S. Treasury yield eased to about 4.16% on Wednesday after testing recent highs, as markets continued to price in further Federal Reserve rate cuts next year. This pullback came despite stronger-than-expected Q3 GDP growth of 4.3%, which supports a more hawkish policy stance, while investors still anticipate up to two cuts in 2026. Bond trading is set to close early ahead of the Christmas holiday.

Futures Update:  U.S. stock index futures were largely flat in early Wednesday trading after the S&P 500 ended at a record high, with strong economic growth data supporting market confidence. S&P 500 futures held near 6,957, Nasdaq 100 futures slipped 0.1% to 25,796.5, and Dow Jones futures remained steady at 48,735.

After a lack of clear direction earlier in the session, stocks generally moved higher throughout the trading day on Tuesday. The major averages extended their gains from recent sessions, with the S&P 500 and NASDAQ reaching new record closing highs. The S&P 500 rose by 31.30 points, or 0.46%, finishing at 6,909.78. From a technical standpoint, the index found support at key levels and gradually climbed, suggesting the possibility of a sustained upward trend in the near future. The 14-day Relative Strength Index (RSI) has crossed above the midpoint, further reinforcing a positive outlook. Key support levels are around 6,844, with resistance expected near 6,977.