Wall Street Extends Gains on Rate-Cut Optimism; Commodities, Crypto, and Macro Signals in Focus

Index Update:  U.S. equities extended gains on Thursday, with the S&P 500 and Nasdaq edging higher as investors priced in an almost certain 25 bps Fed rate cut next week. The Dow added modestly, supported by industrial and financial stocks. Sentiment improved after softer labor-market readings and continued disinflation trends. After-hours action was mixed: DocuSign jumped on strong billings and margin expansion, while Broadcom slipped after providing conservative guidance despite AI-driven revenue growth. Markets now await inflation data and consumer sentiment readings due Friday.

Market Movers (Yesterday):  Capricor Therapeutics, Inc. surged 371.07%, leading the gainers, followed by iRobot Corporation which jumped 73.85%. Acrivon Therapeutics and several other small-cap biotech names also rallied sharply on short covering and FDA-driven optimism. On the downside, WORK Medical Technology Group Ltd fell 35.94%, while Agroz Inc. dropped 33.61%. Select clean-tech and micro-cap industrial stocks also witnessed notable profit-taking.

Commodities Update:  Crude Oil (WTI & Brent): Both benchmarks firmed as escalating geopolitical tensions—Ukrainian strikes on Russian oil assets and stalled U.S.–Russia negotiations—lifted risk premiums. Gains were capped by persistent global demand softness and rising U.S. crude inventories.

Gold: Gold eased slightly as traders booked profits ahead of the Fed meeting. While soft payrolls data boosted rate-cut expectations, investors preferred caution before key inflation readings.

Silver: Silver hovered near multi-decade highs, backed by tightening supply conditions, strong physical demand, and heavy ETF inflows. Expectations of deeper Fed easing and industrial demand strength continued to support prices.

Crypto Update:  Crypto markets traded firm, with Bitcoin stabilizing above key support as ETF inflows resumed and on-chain activity strengthened. Ethereum outperformed amid renewed optimism over staking activity and upcoming protocol upgrades. Altcoins were broadly mixed, with AI-linked tokens and Solana ecosystem assets showing relative strength.

Macro & Micro Updates

• U.S. Layoffs: Employers announced 71,321 job cuts in November, higher YoY but significantly below October’s surge. Telecom—led by Verizon—saw the most reductions, followed by tech and retail. YTD layoffs stand at 1.17 million, the highest since 2020.
• Corporate Earnings: Retail and software names remain in focus as companies guide cautiously for holiday demand. Margins remain pressured by wage inflation and promotions.
• Consumer Trends: Early holiday spending data shows stronger online sales but softer in-store traffic; discount retailers continue to outperform.
• Supply Chain Note: Shipping costs in the Red Sea and Mediterranean edged higher due to geopolitical risks, expected to impact logistics-sensitive sectors.

Bonds Commentary

The U.S. 10-year yield ticked up to near 4.08%, mirroring moves in global yields.

• Japan: Yields hit an 18-year high amid growing expectations of a BOJ rate hike.
• Australia: Yields firmed on hotter inflation data.
• U.S.: Weaker labor data revived rate-cut hopes, though uncertainty around potential Fed leadership changes added volatility.

Futures Update: U.S. equity futures edged slightly higher early Friday, with the Dow, S&P 500, and Nasdaq 100 all up around 0.1%. Markets are pricing in a 25 bps Fed rate cut with roughly 90% probability, while investors now turn their attention to upcoming PPI, CPI, consumer sentiment, and next week’s Fed dot plot for further direction. 

After primarily trending higher over the past two sessions, stocks showed a lack of clear direction during Thursday's trading day. The S&P 500 edged up by 7.12 points, or 0.11%, closing at 6,857.13. 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. However, given the subdued participation at current levels, there is a slight possibility that the index may experience a mild correction in the near term. The 14-day Relative Strength Index (RSI) is above the midpoint, further supporting a positive outlook. Key support levels are around 6,755, with resistance anticipated near 6,977.