The Federal Reserve's liquidity release boosted risk assets, with the Dow and S&P reaching new highs, while U.S. stocks experienced mixed gains and losses.

Thursday’s US stock market continued to digest Federal Reserve policies. Although the Fed’s “dot plot” hinted at limited rate cuts by 2026, the Fed officially halted balance sheet reduction (QT) and launched the Reserve Management Purchase Plan (RMP) in December, which will spend $40 billion over the next 30 days buying short-term Treasury bonds. This move sends a strong liquidity signal to the market.

This action has sparked renewed concerns about re-inflation, leading to a divergence among the three major US stock indices. The Dow Jones Industrial Average rose 1.34% to a new all-time high, the S&P 500 also gained 0.21% to a record, but the Nasdaq failed to follow, instead falling 0.25%, and the China Golden Dragon Index dipped slightly by 0.09%.

In the tech stocks sector, Oracle’s stock was heavily hit after forecasting a significant increase in capital expenditure, raising investor concerns about tech industry spending outlook, resulting in a 10.8% plunge and downward pressure on the entire tech sector. Google fell over 2%, Tesla and Nvidia each declined over 1%. In contrast, Broadcom’s Q4 earnings exceeded expectations, rising over 3% in after-hours trading.

European markets all rose, with the UK FTSE 100 up 0.49%, France CAC 40 up 0.79%, and Germany DAX 30 up 0.68%.

Precious metals and commodities rally collectively, US dollar under pressure

Expectations of loose liquidity have boosted precious metals markets. Silver continued its rally, hitting new historical highs with a daily increase of over 3% to $64.3. Gold rose 1.22%, reaching a high of $4,286, closing at $4,279.1 per ounce.

The US dollar index faced a break lower, down 0.3% to 98.33, prompting the euro/USD to surge 80 points to 0.37%, and USD/JPY also declined 0.29%. The VIX fear index fell 5.77%, reflecting improved market risk sentiment.

Among commodities, precious metals stocks performed strongly, Vista Gold surged over 15%, Hecla Mining over 12%, and Century Aluminum over 6%. Crude oil moved in the opposite direction, with WTI crude down 1.76% to $57.9 per barrel. The US 10-year Treasury yield remained around 4.15%, unchanged from the previous trading day.

Crypto market recovers, Bitcoin slightly up

Driven by the overall rise in risk assets, the crypto market also showed signs of recovery. Bitcoin increased 0.78% in 24 hours, latest price at $92,749. Ethereum fell 2.55% in 24 hours, currently at $3,241.7. (Note: According to latest data, Bitcoin is at $87,480, Ethereum at $2,940)

In Hong Kong stocks, the Hang Seng Index night session futures closed at 25,788 points, up 218 points, 257 points above yesterday’s close of 25,530, with a trading volume of 14,561 contracts. The China Enterprises Index night session futures closed at 9,014 points, up 80 points from yesterday.

US labor market shows signs of easing

Last week, initial unemployment claims in the US rose to 236,000, exceeding the market expectation of 220,000. Data from the US Department of Labor show that for the week ending December 6, seasonally adjusted, new claims increased by 44,000 to 236,000. Although the data rose, economists note that claims fell to a three-year low the previous week, partly due to holiday adjustment difficulties during Thanksgiving. For the week ending November 29, continued claims decreased by 99,000 to 1.838 million after seasonal adjustment. Overall, the labor market remains in a “wait-and-see” state of neither firing nor hiring.

Trade deficit hits five-year low, policy effects gradually emerge

The US trade deficit in September unexpectedly fell to its lowest level since mid-2020, reflecting the initial effects of new tariff policies. The US Commerce Department announced that exports in September rose to $289.3 billion, while imports slightly increased to $342.1 billion, resulting in a trade deficit of $52.8 billion, lower than the market forecast of $63.1 billion and significantly below the previous month’s $59.3 billion deficit, a nearly 11% month-on-month decrease.

Global central banks face re-inflation pressures, rate policies may reverse

Deutsche Bank warned Thursday that signs of re-inflation are emerging globally. As central banks worldwide announce rate decisions this week and next, George Saravelos, head of FX research at Deutsche Bank, pointed out that the Reserve Bank of Australia is facing a clear re-pricing, with expectations to hike rates above 3.6% by February next year. Not only Australia, but many other economies outside the US are also seeing significantly rising rate expectations. Although the US 10-year Treasury yield has remained relatively stable, similar bonds in Korea, Sweden, and Japan have experienced sell-offs of 30 to 50 basis points. Continued loose fiscal policies, rising housing prices, and central banks’ reluctance to tolerate currency weakness are laying the groundwork for a return of global re-inflation.

Bank of England Governor Bailey stated that the BOE will continue quantitative tightening to eliminate interest rate risks from its balance sheet. Bailey plans to significantly reduce the remaining £553 billion in UK bonds and unwind maturing bonds to shrink holdings. Markets expect the BOE to cut rates by 0.25% next week, lowering the base rate to 3.75%, with another rate cut expected in the first quarter of next year, further easing inflation.

Oil market supply outlook diverges sharply

OPEC maintained its forecast of global oil market balance in 2026 on Thursday, believing that if OPEC+ produces about 43 million barrels per day on average, supply and demand can reach equilibrium, roughly aligning with actual production last month. This contradicts the widespread expectation of oversupply.

However, commodities trading giant Trafigura stated this week that a “super oversupply” could occur in 2026. Although the IEA lowered its forecast, it still expects the global oil market to face the largest supply glut in history.

Tech competition intensifies, chip companies accelerate innovation

Broadcom’s Q4 results were outstanding, with net profit up 97% year-over-year to $8.5 billion, adjusted EPS of $1.95, surpassing expectations of $1.86; revenue increased 28% YoY to $18 billion, beating the forecast of $17.5 billion. Semiconductor solutions’ AI chip sales reached $11.07 billion, up 22% annually; infrastructure software sales were $6.94 billion, up 26%.

CEO Hock Tan said the company expects first-quarter revenue of about $19.1 billion, up 28% YoY; importantly, AI chip sales in the first quarter are expected to double to $8.2 billion, including custom AI chips and AI networking chips.

As competition with Google heats up, OpenAI launched an advanced GPT-5.2 AI model, claiming improvements in general intelligence, coding, and long-context understanding. The new model performs better in building electronic tables, creating presentations, and handling complex multi-step projects. GPT-5.2’s real-time, thinking, and professional versions will be released Thursday in ChatGPT, with paid users getting early access. Pricing is $1.75 per million input tokens and $14 per million output tokens.

In the electric vehicle sector, Rivian is developing its own AI chips to replace Nvidia technology. Rivian’s autonomous driving processor chip (RAP1) will be produced by TSMC and will be used in the upcoming R2 SUV. Two RAP1 chips will power the new vehicle computer—the Autonomy Compute Module 3, capable of processing 5 billion pixels per second, with performance four times that of current Nvidia systems.