US equity markets began the week on a softer footing as renewed pressure on artificial intelligence-related stocks weighed on overall sentiment, offsetting strength in more economically sensitive sectors. While early gains faded, the pullback remained measured, reflecting a market still underpinned by rotation rather than broad-based risk aversion. Investors continued to reassess positioning following last week’s shift away from high-flying technology names, with defensive and cyclical areas attracting fresh inflows. Attention now turns to a packed economic calendar, with delayed labour market data, inflation figures, and central bank decisions expected to shape near-term direction across global markets.

Key Takeaways:

  • Dow Jones Industrial Average Shows Relative Stability: The Dow Jones Industrial Average slipped 41.49 points, or 0.09%, to close at 48,416.56. The index again outperformed its tech-heavy peers as investors continued rotating away from AI-linked names. 
  • S&P 500 Closes Slightly Lower as AI Stocks Weigh: The S&P 500 dipped 0.16% to 6,816.51 after early gains faded. Sharp declines in major AI players including Broadcom, Oracle, and Microsoft dragged the index lower. 
  • Nasdaq Composite Declines on Technology Underperformance: The Nasdaq Composite fell 0.59% to 23,057.41, marking the steepest decline among major US indices. Persistent selling in AI-driven and software names extended last week’s weakness. 
  • European Markets Advance Ahead of Central Bank Decisions: European equities closed broadly higher as investors positioned for a pivotal week of interest-rate decisions. The Stoxx 600 gained 0.8%, while the FTSE 100 rose 1.06% to 9,751.31, Spain’s IBEX 35 hit a record 17,034, Italy’s FTSE MIB climbed 1.39% to 44,117, and Germany’s DAX added 0.18% to 24,230. Markets focused on the ECB’s upcoming decision, with rates expected to remain at 2%, along with policy announcements from the BOE. ECB President Christine Lagarde signalled optimism about the region’s outlook, indicating growth projections may be revised higher. Eurozone industrial output increased 0.8% on the month and 2.0% year on year, beating expectations. Strong German performance offset a drop in Italy and subdued French activity, while survey data showed improving sentiment and rising capex intentions across both large and small firms.
  • Asian Markets Mixed Amid Chinese Data and AI Concerns: Asia-Pacific markets displayed a mixed performance on Monday, influenced by Wall Street’s prior session decline and investor caution surrounding the AI trade. South Korea’s Kospi led losses, falling 1.84% to 4,090.59, with major chipmakers SK Hynix and Samsung Electronics declining significantly. Conversely, the small-cap Kosdaq saw a modest gain of 0.16% to 938.83. Japan’s Nikkei 225 slid 1.31% to 50,168.11, despite positive Tankan survey results showing improved business optimism among large manufacturers. The Topix, however, edged up 0.22% to 3,431.47. Australia’s S&P/ASX 200 lost 0.72% to 8,635, primarily due to weakness in mining and energy sectors driven by falling commodity prices. India’s total goods exports for November increased 19% year-on-year to $38.13 billion, and its merchandise trade deficit narrowed considerably to $24.5 billion. Hong Kong’s Hang Seng index declined 0.79%, and mainland China’s CSI 300 fell 0.63% to 4,552.06, following disappointing November economic data, including weaker-than-expected retail sales and industrial production figures, alongside renewed concerns in the property sector after China Vanke bondholders rejected a repayment delay proposal.
  • Oil Prices Decline as Oversupply Concerns Persist: Brent crude fell 1.31% to $60.32 a barrel, while WTI slid 1.46% to $56.59. Both benchmarks extended last week’s losses of more than 4% as expectations of a widening global surplus into 2026 continued to pressure prices. Venezuelan export disruptions and geopolitical risks offered limited support against oversupply narrative.
  • Treasury Yields Edge Lower as Investors Await Key Data: US Treasury yields declined modestly ahead of a busy economic calendar. The 10-year yield slipped to 4.182%, the 2-year fell to 3.51%, and the 30-year eased to 4.853%. Investors awaited delayed nonfarm payrolls and unemployment data, followed by retail sales and Thursday’s CPI release, with headline and core inflation expected to rise to 3.1% year on year.
  • Manufacturing Activity Weakens as New York Index Turns Negative: The New York Empire State Manufacturing Index dropped sharply to -3.90, missing expectations for 10.00 and falling from 18.70 previously. The negative reading signalled a sudden deterioration in manufacturing conditions, highlighting softness ahead of this week’s broader economic releases.

FX Today:

  • EUR/USD Extends Higher Toward Recent Tops: EUR/USD closed at 1.1751, up 0.09%, after trading between 1.1769 and 1.1726 as the pair continued to build on early December momentum. Price remains comfortably above the 50-day SMA at 1.1607, the 100-day SMA at 1.1644, and the 200-day SMA at 1.1492, maintaining a well-defined bullish structure with higher highs and higher lows since mid-summer. The latest advance brings the pair closer to resistance near 1.1769 and the psychological 1.1800 level, where earlier rallies have stalled. Initial support sits at 1.1726 and then 1.1680, while a sustained daily close above 1.1769 would strengthen bullish bias and open the path toward 1.1800 and potentially higher.
  • GBP/USD Holds Above Key Moving Averages: GBP/USD finished at 1.3373, up 0.01%, trading between a high of 1.3402 and a low of 1.3355 as the pair paused after its recent recovery from November’s lows. Price remains above the 50-day SMA at 1.3254 and the 200-day SMA at 1.3345 while sitting narrowly above the 100-day SMA at 1.3360, suggesting a cautiously constructive near-term bias. Resistance remains at 1.3402 and then 1.3450, while support lies at 1.3355 and the 50-day SMA. A close above 1.3402 would reassert bullish momentum, though a drop below 1.3355 risks a deeper pullback toward 1.3254.
  • USD/JPY Pulls Back as Sellers Test Recent Highs: USD/JPY closed at 155.23, down 0.36%, after trading between 155.98 and 154.83 as selling pressure emerged near multi-year highs. Despite the setback, the pair remains firmly above the rising 50-day SMA at 154.14, the 100-day SMA at 150.98, and the 200-day SMA at 148.33, keeping the broader uptrend intact. Resistance stands at 155.98 and 156.00, while support sits at 154.83 and then the 50-day SMA. A close above 155.98 would reopen upside potential, while a move below 154.83 could trigger a deeper correction without altering the larger bullish structure.
  • EUR/GBP Edges Higher as Bullish Trend Persists: EUR/GBP closed at 0.8786, up 0.14%, after trading between 0.8788 and 0.8758, extending its gradual advance since late August. Price continues to trade above the rising 50-day SMA at 0.8755, the 100-day SMA at 0.8713, and the 200-day SMA at 0.8609, with all three pointing to sustained upside momentum. Resistance is located at 0.8788 and then 0.8810, while support lies at 0.8758 and the 50-day SMA. A close above 0.8788 would confirm renewed bullish acceleration.
  • Gold Consolidates Near Record Highs: Gold ended at $4305, up 0.13%, after moving between $4350 and $4285 as the metal continued to consolidate near its all-time highs. Price remains well above the rising 50-day SMA at $4117, the 100-day SMA at $3819, and the 200-day SMA at $3527, maintaining a strong long-term uptrend. Immediate resistance is at $4350 and then $4380, while support sits at $4285 and $4250. A close above $4350 would signal the next bullish extension.
  • Silver Extends Multi-Month Rally to New Highs: Silver closed at $64.08, up 3.48%, after trading between $64.16 and $61.49 in another strong session. Price is positioned well above the 50-day SMA at $52.32, the 100-day SMA at $46.47, and the 200-day SMA at $40.39, confirming a powerful, accelerating uptrend. With no overhead resistance given the new highs, support lies at $62.00 and then $61.49. A sustained close above $64.00 keeps the bullish trajectory intact.

Market Movers:

  • iRobot Plunges on Bankruptcy Filing: iRobot collapsed 72% after the company filed for Chapter 11 bankruptcy protection. Hong Kong–based Picea will acquire the Roomba maker as part of the restructuring. 
  • Immunome Surges on Phase 3 Trial Success: Immunome gained 15% after positive late-stage results for varegacestat, a desmoid tumour treatment. Management said the drug shows best-in-class potential as a once-daily oral therapy. 
  • Zillow Drops on Google Search Listing Tests: Zillow fell 8.5% after reports that Google is experimenting with displaying property listings directly in search results. 
  • Rocket Lab Reverses Early Gains: Rocket Lab fell 10% after rising on reports that SpaceX plans to go public in 2026. The potential IPO followed an $800 billion valuation in the latest funding. 
  • ServiceNow Slides on Acquisition Reports: ServiceNow lost 11.5% after reports it is in talks to acquire cybersecurity firm Armis for about $7 billion. 
  • ARM Holdings Falls on Goldman Sachs Downgrade: ARM dropped 5% after Goldman Sachs cut its rating to sell from neutral. The broker set a price target of $120, citing valuation concerns. 

Market movements on Monday highlighted the increasingly selective nature of investor positioning, with sector rotation rather than broad risk aversion dictating the day’s tone. Technology and AI names continued to adjust after an extended period of leadership, while opportunities emerged across value-driven and economically linked areas. Global markets displayed a wide divergence in performance, reflecting regional data and policy expectations. With pivotal US releases approaching, including delayed employment figures and the latest inflation update, investors will gain clearer insight into whether current rotations mark a temporary pause or the early stages of a broader realignment heading into year-end.