Equities Rally as Fed Cut Bets Rose

November 26, 2025 at 21:00 UTC

4 min read

US and European equities rally with Fed rate cut expectations and rising stock market charts

Key Points

Softer retail sales and mixed inflation reports have increased bets on a December Fed cut, lifting equities and lowering short-term Treasury yields.
US benchmarks have advanced, led by gains in the S&P 500 (SPX), Nasdaq and Dow, and European indices have followed on U.S. risk-on spillover.
Consumer-defensive and utility ETFs have outperformed while healthcare has lagged; ARWR, URBN and SYM have posted large gains, while NTNX, AMBA and ZS have declined sharply.
Boris Vujcic has cautioned the ECB to cut only after sustained inflation declines, and the UK OBR has revised up medium-term inflation, narrowing the near-term case for a BoE rate cut.

Global Market Summary

US equities advanced as markets priced a December Federal Reserve rate cut, with the S&P 500 (SPX) up 0.74%, the Nasdaq (^IXIC) up 0.80% and the Dow (DJIA) up 0.69%. European benchmarks followed, led by Germany's DAX (DAX) which gained 0.97%, the FTSE (UKX) up 0.83% and France's CAC (FRA40) up 0.82%, reflecting spillover from U.S. risk-on flows. Asia was mixed, with Hong Kong's Hang Seng (HSI) up 0.13% while the Shanghai Composite (000001.SS) slipped 0.15% as regional performance tracked U.S. gains unevenly.

Top Movers

Sector leadership: consumer-defensive ETF XLP rose 1.16% and utilities XLU rose 1.08%, while healthcare ETF XLV lagged, down 0.13%. Top gainers included ARWR (17.09%), URBN (12.00%) and SYM (10.95%). Notable decliners were NTNX (-17.02%), AMBA (-14.34%) and ZS (-11.58%).

Macro highlights

Markets traded on an active macro calendar, with the Q3 GDP second estimate (forecast 1.0%) and September durable goods orders (consensus 0.3%) in focus for their implications on Fed policy. ECB-affiliated policymaker Boris Vujcic warned that the ECB should cut rates only if inflation shows a sustained downward path, reinforcing a cautious tone on euro-area easing. The UK OBR revised up its medium-term inflation profile, narrowing the near-term case for a Bank of England rate cut and affecting gilt pricing.

News that moved markets

Investors ramped up bets on a December Fed rate cut after softer-than-expected September retail sales and mixed inflation reports, which lifted equities and pushed short-term Treasury yields lower. Separately, reports that Chinese regulators blocked ByteDance from using Nvidia chips pressured NVDA in pre-market trade amid a holiday-shortened, low-volume session.

What to Watch Tomorrow

DE GfK Consumer Confidence (DEC) — forecast -22 vs -24.1 prior, Nov 27 | Gauges household sentiment and near-term consumption trends affecting demand.

Key Takeaways

US equities advanced as investors ramped up bets on a December Fed rate cut; the S&P 500 (SPX), Nasdaq and Dow all closed higher.
European benchmarks rose, led by Germany's DAX, as spillover from U.S. risk-on flows supported gains across major indices.
Short-term Treasury yields declined and equities rallied after softer-than-expected September retail sales and mixed inflation reports increased Fed-cut bets.
Consumer-defensive and utilities ETFs outperformed while healthcare lagged; ARWR, URBN and SYM were top gainers and NTNX, AMBA and ZS were notable decliners.