U.S. stocks hit five consecutive gains to new highs! Economic resilience vs. rate cut expectations, here's how the market is choosing

The last trading day before the Christmas holiday, global capital markets experienced a divergence. The three major US stock indices all rose, with the Dow up 0.6%, the S&P 500 up 0.32%, and the Nasdaq up 0.22% — both the S&P 500 and the Dow hit new all-time closing records, continuing a five-day winning streak. In contrast, European stock markets came under pressure, with the UK FTSE 100 down slightly by 0.19%, France’s CAC 40 nearly flat, and Germany markets closed for the holiday.

Economic Data Offset Employment Worries, US Treasury Yields Under Pressure

Last week’s US initial jobless claims data unexpectedly declined, seasonally adjusted to 214,000, below the market expectation of 223,500. However, the signals behind this data warrant caution: although new unemployment claims fell, the number of people continuing to claim unemployment benefits increased by 38,000 to 1.923 million, highlighting that the labor market is entering a “hiring freeze” — companies are neither actively creating jobs nor engaging in large-scale layoffs, and market expectations for the December unemployment rate remaining high are gradually strengthening.

But these concerns were soon alleviated by the Q3 GDP data. The US real GDP growth rate unexpectedly rose to 4.3%, the fastest in nearly two years, demonstrating the resilience of the US economy. This strong performance boosted market optimism about corporate earnings prospects for next year and became an important support for US stocks. Meanwhile, the 10-year US Treasury yield was pushed down to around 4.13%, down 3 basis points from the previous trading day. The US dollar index remained below 98.0, closing at 97.95.

In precious metals, gold fell 0.13% to $4,479.4 per ounce, and silver also declined, easing market risk aversion. The oil market also weakened, with WTI crude down 0.12% at $58.4 per barrel.

Technology Stocks Lead the Winners, Storage Chips Surge Remarkably

Led by the upward trend in US stocks, the technology sector performed most notably. Micron Technology led the gains, closing up 3.77% for the day, with its annual increase surpassing 241%; Western Digital rose 300% year-to-date; SanDisk also closed up 2.12%, with a year-to-date increase of 613% — the strong performance of the storage chip sector reflects sustained demand for AI computing power.

Crypto Market Remains Resilient

Bitcoin performed steadily, with a 24-hour increase of 1.76%, latest price at $91.33. Ethereum also moved higher, up 1.22% over 24 hours, trading at $3.14. The recovery in market risk appetite has created a favorable trading environment for digital assets.

Important Signals from Policy and Corporate Developments

The Federal Reserve’s rate cut expectations for next year remain steady. According to CME FedWatch, the market still expects the Fed to cut rates twice in 2026, each by 25 basis points. However, BlackRock strategists warn that, with this rate cut cycle having already reduced rates by 175 basis points and approaching neutral levels, room for further cuts in 2026 will be quite limited unless there is a sharp deterioration in the labor market.

Morgan Stanley analysts note that companies are passing on tariffs through price hikes, which proved effective in early Q3, and plan to further raise prices in 2026. This could pose a risk of inflation recurrence.

OpenAI is preparing major commercialization initiatives, with employees exploring plans to embed advertisements within ChatGPT responses, aiming to create a new form of digital advertising. Nvidia has paused progress on testing the 18A process in collaboration with Intel, with the partnership outlook uncertain.

EU crypto regulation enters a new phase: the DAC8 rules, effective from January 1, 2026, will require trading platforms to report user transaction details, with violators potentially facing cross-border asset freezes or confiscation.