Fed Cut and T-bill Restart Drove Rally
Key Points
- The Fed's 25bp rate cut and restart of short-dated T-bill purchases lowered short-term yields and supported risk assets across U.S. and European markets.
- Oracle (ORCL)'s revenue miss and higher capex outlook triggered steep selling in AI-exposed names, which pressured the Nasdaq, while Broadcom (AVGO)'s beat left the semiconductor sector volatile.
- Investors rotated into cyclicals and financials, driving European benchmark gains while Asian bourses softened as global cues and sector rotation weighed on regional markets.
Global Market Summary
U.S. markets closed mixed as investors rotated after earnings and policy news: the Dow Jones (DJIA) rose 1.34%, the S&P 500 (SPX) gained 0.21% and the Nasdaq (^IXIC) slipped 0.25% amid the Fed's 25bp cut and profit-taking in AI names. European benchmarks outperformed, with the CAC (FRA40) up 0.79%, the FTSE (UKX) up 0.49% and the DAX (DAX) up 0.68% on a shift into cyclicals and financials. Asian bourses were softer, with Shanghai (000001.SS) down 0.70%, Hong Kong (HSI) down 0.04% and the Nikkei (NKY) down 0.90% as global cues and sector rotation weighed on regional markets.
Top Movers
Basic materials (XLB +1.99%) and financials (XLF +1.82%) led sector gains while energy (XLE -0.48%) and technology (VGT -0.36%) lagged. Top individual movers included PL (35.01%), RYTM (12.27%) and HL (12.57%) on the upside and WVE (-17.20%), ORCL (-10.93%) and HOOD (-9.06%) on the downside.
Macro highlights
The Federal Reserve cut the funds rate 25bp to 3.50%–3.75% and said it will resume short-dated Treasury bill purchases, actions that lowered short-term yields and supported equities. The Swiss National Bank's assessment emphasized exchange-rate risks and a data-dependent stance, keeping Swiss short-term rate expectations sensitive while Banque de France commentary reinforced ECB-area vigilance on inflation.
News that moved markets
The Fed's easing and restart of T-bill purchases pushed short-term yields lower and helped lift risk assets earlier in the session. Oracle (ORCL)'s revenue miss and higher capex outlook triggered steep selling in AI-exposed names and pressured the Nasdaq, while Broadcom (AVGO)'s beat and AI revenue guidance supported after-hours interest in semiconductor peers but left the sector volatile. Spectrotel completed its acquisition of Mosaic NetworX and Winners Inc. completed the acquisition of Moneyline Sports Inc.; Enova announced a definitive agreement to acquire Grasshopper Bank.
Upcoming session watchlist
- GB GDP MoM (OCT) — consensus 0.1% vs -0.1% prior, Dec 12, 07:00 | Gauges month-over-month GDP changes and near-term growth momentum.
Key Takeaways
- U.S. indexes closed mixed: the Dow (DJIA) rose 1.34%, the S&P 500 (SPX) gained 0.21% and the Nasdaq slipped 0.25% amid Fed easing and profit-taking in AI names.
- European benchmarks outperformed as rotation into cyclicals and financials pushed the CAC (FRA40), FTSE (UKX) and DAX (DAX) higher while basic materials and financials led sector gains.
- Asian markets were softer as Shanghai, Hong Kong and the Nikkei (NKY) declined, reflecting global cues and sector rotation that weighed on regional equities.
References
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