Overnight US stocks | NASDAQ and S&P 500 Index fell this week, spot gold climbed 2.49%

The Zhitong Finance App learned that on Friday, the three major indices fell, and the Dow and S&P 500 indices fell from record highs. Philadelphia Federal Reserve Chairman Paulson said there is room for further interest rate cuts. US President Trump said he would prefer Walsh or Hassett as the chairman of the Federal Reserve, and the next chairman of the Federal Reserve should communicate with him on interest rates.

The S&P 500 index and Nasdaq were lower this week, with the former falling 0.63% and the latter by 1.62%. The Dow achieved weekly gains, rising 1.05% this week.

[US stocks] At the close, the Dow fell 245.96 points, or 0.51%, to 48458.05 points; the NASDAQ fell 398.69 points, or 1.69%, to 23195.17 points; the S&P 500 index fell 73.59 points, or 1.07%, to 6827.41 points. Tesla (TSLA.US) rose 2.7%, Nvidia (NVDA.US) fell 3.27%, Broadcom (AVGO.US) fell 11.43%, and Apple (AAPL.US) rose 0.09%.

[European stocks] The German DAX30 index fell 100.81 points, or 0.42%, to 24177.40 points; the British FTSE 100 index fell 62.26 points, or 0.64%, to 9640.90 points; the French CAC40 index fell 17.14 points, or 0.21%, to 8068.62 points; the Eurostock 50 index fell 36.01 points, or 0.63%, to 5717.95 points; Spain's IBEX35 index fell 55.48 points, or 0.33%, to report 16827.52 points; Italy's FTSE MIB index fell 192.01 points, or 0.44%, to 43510.00 points.

[Asia Pacific Stock Market] The Nikkei 225 Index fell 0.9%, South Korea's KOSPI Index fell 0.59%, India's BSE SENSEX rose 0.51%, and the Indonesian Composite Index fell 0.92%.

[Foreign Exchange] The Bloomberg US dollar index rose less than 0.1% in light trading on Friday, but it still fell in a single week; it has fallen 0.9% so far in December, and December is usually a weak month for the US dollar. The one-month risk reversal for the Bloomberg dollar index fell into a bearish range this week for the first time since early October.

[Cryptocurrency] Bitcoin dived again. As of press release, Bitcoin had fallen more than 2% to 90352.04 US dollars; Ethereum fell more than 4%, and the price fell below 3,100 US dollars.

[Precious Metals] Spot gold rose 0.47% and settled above 4,300 US dollars at the close, with a cumulative increase of 2.49% this week. COMEX gold futures rose 0.48% to 4333.60 US dollars/ounce, rising 2.14% this week, and once to 4387.80 US dollars on Friday. Gold prices continued to rise, supported by expectations that the Federal Reserve will cut interest rates further next year and continued geopolitical uncertainty driving safe-haven demand. Commerzbank analysts said, “Although there are signs that the next Federal Reserve meeting in January may suspend interest rate cuts, the door is still open for further interest rate cuts thereafter. We expect interest rate cuts to exceed current market expectations, especially after Powell's successor officially takes office as Chairman of the Federal Reserve in May next year.”

[Crude Oil] The WTI crude oil futures contract for January delivery fell 0.28% to close at $57.44 in the New York market; Brent crude fell 0.26% to close at $61.12 a barrel in February.

[Macro News]

Federal Reserve Hamak: With a more austerity stance, the current policy is almost neutral. Cleveland Federal Reserve Chairman Hamak said she would prefer a slight tightening of interest rates in order to continue putting pressure on inflation, which is still too high. “Currently, our policy is generally at a neutral level,” Hamak said on Friday. “I prefer to take a slightly austerity stance to help continue putting pressure on inflation.” Hamak did not have the right to vote this year, but will be eligible to vote in 2026. When asked if she supports this week's decision to cut interest rates, she did not directly answer; she only called it a “complicated decision” because policymakers are facing two-way pressure from a dual mission. Hamak also said that she expects key inflation and employment data to be released in the next few weeks to help policymakers more clearly judge economic trends. At the same time, she pointed out that the Federal Reserve lacks proper tools to deal with structural changes in the economy.

US 30-year Treasury yields rose to their highest level since September. The price of US long-term treasury bonds fell, and the yield on 30-year treasury bonds rose to the highest level since the beginning of September. The impact of the Federal Reserve's interest rate cuts and policy stance gradually penetrated the market this week. The yield on 30-year treasury bonds once rose 6 basis points to 4.86%, a record high since September 5. The cumulative increase this week was about 5 basis points. The yield on 2-year treasury bonds remained basically flat on Friday and declined slightly this week. Expectations that the Federal Reserve may cut interest rates further next year have supported the decline in short-term treasury bond yields, while long-term treasury bond yields reflect that inflation is still high. Chicago Federal Reserve Chairman Goulsby and Kansas Federal Reserve Chairman Schmid said on Friday that concerns about inflation are the main reason they oppose interest rate cuts and support maintaining the status quo. Strategist Edward Harrison said, “Goulsby said his opposition to interest rate cuts was due to concerns about inflation. Given that traders still expect two 25 basis point interest rate cuts by the end of 2026, his remarks indicate that US Treasury bonds face downside risks.”

Federal Reserve Goulsby: Government financing costs should not be taken into account when formulating policies. Federal Reserve Goulsby said on Friday that the central bank should not consider government financing costs when formulating interest rate policies, adding that this is a key reason why the independence of the Federal Reserve is critical. “What saddens me is that people would honestly say... why would a group of people outside the government, outside the executive branch decide interest rates? They should not remain independent,” Goulsby said at the Chicago Federal Reserve Economic Symposium. “Some have even suggested that the Federal Reserve should cut interest rates to reduce government borrowing costs. This is actually monetizing debt. This is the fundamental reason we want the Federal Reserve to remain independent.” US President Trump has said that the Federal Reserve should cut interest rates to reduce government borrowing costs.

Federal Reserve Paulson: Monetary policy that is more concerned about employment risks is restrictive. Philadelphia Federal Reserve Chairman Paulson said on Friday that what she is most concerned about is the state of the labor market. The current monetary policy stance should help bring inflation back to the 2% target. She said, “My current concerns about the weak labor market are still slightly greater than my concerns about the risk of rising inflation.” Part of this is because “I think next year, as the impact of tariffs gradually subsides, inflation is likely to gradually fall back.” Although Paulson did not give clear forward-looking guidance in her speech, she emphasized: “I still believe that monetary policy is somewhat restrictive.” This level of interest rates, combined with the cumulative effects of past austerity policies, should help inflation return to the 2% target. Paulson described the current labor market as “bending, but not yet broken,” and pointed out that “by cutting interest rates by a total of 75 basis points over the past three times, we have provided some insurance to prevent further deterioration of the labor market.” Paulson pointed out that the situation will be more clear at the beginning of next year (when she will become the FOMC voting committee), and more information will be available at that time.

Nasdaq has greater discretion to reject high-risk IPOs. According to media reports, the Nasdaq Exchange has been given greater discretion to reject IPO applications where there is a risk of manipulation. The new regulation was immediately approved by the US Securities and Exchange Commission (SEC) for immediate effect on Friday. The new rules authorize Nasdaq to refuse to list a company if its business location does not comply with US regulatory scrutiny; an underwriter, broker, attorney, or auditor has participated in a problematic transaction; and there are concerns about the integrity of management or major shareholders. The move was aimed at dealing with the sharp drop in prices after the listing of a large number of small IPOs in recent years. In the past year, half of NASDAQ's IPOs raised less than $15 million, and most of these shares fell by more than 35% in one year.

Goldman Sachs: Optimistic about US stock market performance in 2026, the six major technology companies will contribute nearly half of the growth. Goldman Sachs expects the market to continue to strengthen in 2026 and has set a target of 7,600 points for the S&P 500. Ben Snider, chief US stock strategist at Goldman Sachs, said that artificial intelligence-driven productivity will drive earnings. Earnings per share (EPS) of the S&P 500 index are expected to increase by 12% to $305, with six major technology companies contributing nearly half of the increase. While big tech companies are still the main driving force, Snider also expects the earnings of the index's other constituents to improve. He pointed out that the risks ahead include the Federal Reserve's slowing down the pace of easing and pressure on profit margins, but he still maintains a positive outlook overall.

Misjudging that the stock market is rising, hedge fund managers are fully betting that infrastructure stocks will still make a profit of 79% during the year. New York hedge fund manager Bill Harnisch warned early this year that the market is overvalued and that Trump's tariff agenda could disrupt the global trade order. While his peers diversified their capital into large technology stocks and macro transactions in 2025, he concentrated more than 90% of his Peconic Partners fund's long positions on three infrastructure builder stocks Quanta Services, Dycom Industries, and Mastec that lay power lines and fiber networks for artificial intelligence, high-speed internet, and the clean energy boom. This strategy helped the $3.1 billion fund it manages to return 79% this year, far exceeding the S&P 500 by more than four times. Looking ahead to 2026, Harnisch maintains a cautious stance and expects the S&P 500 to “stay flat or even fall,” contrary to mainstream Wall Street views.

[Individual Stock News]

Oracle responds: It will not delay the construction of data centers related to OpenAI. Some media reported on Friday that due to labor and material shortages, Oracle (ORCL.US) will delay the construction of data centers related to OpenAI from 2027 to 2028, but Oracle later denied this report. Oracle spokesman Michael Egbert said in an email statement: “After the agreement was signed, we closely coordinated with OpenAI to determine the site selection and delivery schedule, and reached an agreement. There were no delays at any of the sites required to meet contractual commitments, and all milestones were on track. “We remain fully aligned with OpenAI and are confident in our ability to meet our contractual commitments and future expansion plans,” he added. Following the publication of the response, Oracle (ORCL.N) stock price recovered some of its losses.

[Major Bank Ratings]

UBS (UBS.US): Covers Delta Air Lines (DAL.US) and gives a “buy” rating, with a target price of $90