Global stocks are starting the week in a holding pattern as traders brace for the year’s final Federal Reserve meeting, a wave of central‑bank decisions, fresh economic data, and heavyweight tech earnings. Under the surface, however, there’s plenty going on — from a surprise surge in Chinese exports to a rare warning that both gold and equities may be in bubble territory.
Global markets today: cautious green with pockets of stress
Equities are broadly flat to slightly higher, with “Fed week” keeping risk-taking in check:
- Global equities: A broad world index was little changed on Monday, with U.S. futures up only ~0.1–0.2% as traders all but price in a quarter‑point cut from the Fed this Wednesday. [1]
- U.S. futures: As of early U.S. pre‑market, Dow futures were up about 0.02%, S&P 500 futures around 0.14% higher, and Nasdaq 100 futures up roughly 0.25%. [2]
- Europe: The pan‑European STOXX 600 is down about 0.1%, with London’s FTSE 100 and Spain’s IBEX also off about 0.1%. [3] Consumer staples are the biggest drag as Unilever slumps after completing its Magnum ice cream spin‑off, and L’Oréal falls following news it will raise its stake in Galderma. [4]
- Asia: Markets were mixed. Hong Kong’s Hang Seng fell around 1–1.2%, while Shanghai’s main index gained roughly 0.5%, reflecting optimism over stronger‑than‑expected Chinese export data. [5] Major European benchmarks like Germany’s DAX and France’s CAC 40 are hovering near flat levels. [6]
The S&P 500 itself is entering the week just below record levels — a little over 6,870 compared with an all‑time high near 6,890. That leaves little margin for error if the Fed disappoints markets hoping for a smooth year‑end “Santa rally.” [7]
Fed decision dominates: a likely cut, but guidance is the real story
The December 10 Fed meeting is easily the single most important event for equity markets this week — and it’s already shaping today’s trading.
What markets expect
- Futures and options markets now price roughly an 85–87% chance that the Fed will cut the federal funds rate by 25 basis points, from 3.75–4.00% to 3.50–3.75%. [8]
- A Reuters poll of 108 economists found the vast majority expect a cut; only a small minority still see no move. [9]
- RBC Economics, which a month ago was not assuming a December easing, now expects a third consecutive 25 bps cut, citing softer data and more dovish Fed communication. [10]
The twist: this may be one of the most divided Fed meetings in years. Analysts widely expect multiple dissents in favour of holding rates, with some noting it could be the largest split since the early 1990s. [11]
Why stocks care more about Powell’s tone than the cut itself
For equities, the rate move is largely priced in. What matters now is:
- The “dot plot” of rate projections for 2026
- Fed Chair Jerome Powell’s press conference tone
- Any hints on how the Fed will react if inflation proves sticky next year
The U.S. 10‑year Treasury yield ended last week around 4.14%, after climbing more than 10 basis points, a sign of bond‑market nerves about how quickly rates can really fall in 2026. [12]
That leaves stocks finely balanced between two narratives:
- Soft landing / gentle easing → supportive for growth, tech and high‑duration names
- “Hawkish cut” → a one‑off move paired with caution on further easing, which could push yields up and pressure valuations in richly priced sectors
With U.S. indices near all‑time highs, any hawkish surprise or hint of a slower cutting path could hit risk assets hard.
Today’s economic data: China trade beats, Germany surprises, U.S. factory orders ahead
Monday’s macro calendar isn’t packed with top‑tier releases, but it still carries several data points that can sway sector moves and bond yields.
1. China’s November trade shock
Chinese trade data released today beat expectations and are a big talking point for global markets: [13]
- Exports: +5.9% year‑on‑year vs. 3.8% expected, snapping back from a contraction in October
- Imports: +1.9% vs. 3.0% expected, signalling domestic demand remains subdued
- Monthly trade surplus: $111.7 billion, the highest since June
- Year‑to‑date surplus: Surpassed $1 trillion for the first time, underlining China’s dominant position in global goods trade
Behind the headline:
- Exports to the U.S. plunged 29% amid average U.S. tariffs around 47.5% on Chinese goods.
- Shipments to Europe, Australia and Southeast Asia rose sharply as exporters reroute trade away from the U.S. market. [14]
For stocks, this matters because:
- Strong exports support Asian earnings, especially in tech hardware, machinery and shipping.
- A huge surplus risks re‑igniting trade tensions, particularly as the U.S. administration leans on tariffs, which could influence sentiment toward multinationals and export‑heavy sectors.
2. Germany industrial production: upside surprise
Fresh data this morning showed German industrial production rising 1.8% month‑on‑month in October, far above the consensus expectation of a modest 0.2% gain and reversing earlier concerns about stagnation in Europe’s manufacturing engine. [15]
That positive surprise helps cyclicals and industrials, but European indices are still subdued as investors wait for the Fed, SNB, RBA and BoC meetings later in the week. [16]
3. U.S. data: factory orders and Treasury auction on deck
In the U.S., factory orders and related manufacturing indicators are the main scheduled releases today, alongside a 3‑year Treasury note auction: [17]
- Factory Orders (10:00 ET): Previous +1.4%
- Durable Goods ex‑transport: Previous +0.6%
- Factory Orders ex‑transport: Previous +0.1%
- 3‑Year Note Auction (13:00 ET): Prior yield 3.579%
These aren’t typically “market‑moving” like payrolls or CPI, but with the Fed meeting just days away, any sign of weakening manufacturing or poor demand for Treasuries could ripple through bond yields and rate‑sensitive stocks.
Central‑bank week: not just about the Fed
While the Fed is the main event, equity traders are also watching several other policy decisions that can reshape currency moves, credit conditions and sector performance.
According to S&P Global and RBC, this week features: [18]
- Federal Reserve (U.S.) – expected 25 bps cut on Wednesday
- Bank of Canada (BoC) – widely seen holding rates steady after cuts in September and October
- Swiss National Bank (SNB) – also expected to hold, with officials wary of pushing policy back into negative territory
- Reserve Bank of Australia (RBA) – markets have largely priced out further near‑term easing and see potential hikes in 2026
- Brazil’s central bank – decision watched closely after Brazil’s stock market suffered a >4% slide on Friday amid political turmoil
- Turkey, the Philippines and others – local decisions matter for emerging‑market equities, FX and global carry trades
Taken together, this is a global repricing week for interest‑rate expectations. Equity investors are especially sensitive to any signals that global easing could be slower or more fragmented than the Fed‑centric narrative implies.
Earnings and corporate stories: AI, autos and index reshuffles
Even in Fed week, single‑stock news is driving sharp moves — especially in tech, autos and AI‑linked names.
1. Big-tech and AI earnings later this week
Options markets are bracing for big moves around quarterly reports from: [19]
- Broadcom (AVGO) – key barometer for AI infrastructure and data‑center demand
- Adobe (ADBE) – test of software demand and AI‑driven creative tools
- Oracle (ORCL) – cloud and AI database story, closely watched after a strong run in AI‑related capex
- Costco (COST) – insight into U.S. consumer strength heading into the holiday season
Implied volatility suggests traders are positioned for meaningful post‑earnings swings, making these reports crucial for sector ETFs and mega‑cap benchmarks.
2. IBM–Confluent: another big AI‑data bet
International Business Machines (IBM) is in advanced talks to acquire Confluent (CFLT), a data‑infrastructure company, in a deal valued at around $11 billion, one of IBM’s largest acquisitions in recent years. [20]
- A deal could be announced as soon as today, though talks could still fall apart.
- Confluent shares are surging in pre‑market trading on the prospect of a takeover premium. [21]
For investors, this underscores two themes:
- Legacy tech’s pivot to AI and data streaming, and
- Ongoing consolidation in infrastructure software — a bullish sign for the sector but also a reminder that valuations are rich.
3. Tesla downgrade and autos under pressure
Tesla (TSLA) is under pressure after Morgan Stanley downgraded the stock from Overweight to Equal Weight, citing valuation concerns following a strong run. [22]
- The bank’s new analyst argues the next 12 months could be “choppy” as expectations catch up with fundamentals.
- In Europe, Ferrari also dropped after a separate downgrade, contributing to a 0.5% decline in the region’s auto sector today. [23]
With the Fed potentially easing and bond yields volatile, highly valued growth names like Tesla stand out as especially sensitive to any shift in rate expectations.
4. Carvana joins the S&P 500
Used‑car retailer Carvana is set to join the S&P 500 later this month, part of the index’s quarterly rebalancing. [24]
- The announcement has already triggered a sharp rally (around 9% at one point) as passive index funds prepare to buy shares. [25]
- Index changes like this can create technical flows that temporarily decouple stock moves from fundamentals — something short‑term traders often try to exploit.
Commodities, gold and the “double bubble” warning
Gold rallies on Fed bets and a weaker dollar
Gold prices are inching higher again today:
- Spot gold is trading around $4,200 per ounce, up about 0.2% on the day. [26]
- The dollar index is hovering near a one‑month low, making dollar‑denominated bullion cheaper for non‑U.S. buyers. [27]
- Futures markets see about an 87% chance of a December Fed cut, a classic tailwind for non‑yielding assets like gold. [28]
BIS: gold and stocks may both be in bubble territory
In an unusual development, the Bank for International Settlements (BIS) has warned that gold and U.S. stocks are showing “explosive” price behavior simultaneously — something not seen in the last 50 years. [29]
Key points from the BIS analysis:
- Gold is up roughly 60% in 2025 and more than 150% since 2022, helped by inflation fears, geopolitical stress and central‑bank buying. [30]
- U.S. equities, led by tech and AI names, are also near record highs.
- Retail investors and ETF flows have played a growing role in both markets, a classic red flag in past bubble episodes. [31]
For equity investors, the risk is that both “risk-on” and “safe‑haven” assets could correct together in a shock scenario, limiting diversification benefits.
Oil steady around $63–64, but 2026 looks softer
Crude is quieter but still important for equity positioning:
- Brent crude is trading just below $64 a barrel, near the top of its recent range. TechStock²+2Bloomberg+2
- Supportive short‑term drivers: expected Fed easing, strong oil demand readings from India and China, and Chinese stockpiling at current price levels. TechStock²+1
- Medium‑term, the U.S. Energy Information Administration (EIA) forecasts Brent to average about $54 in Q1 2026 and $55 for full‑year 2026, as a sizable global surplus emerges. [32]
Energy stocks could therefore see near‑term support from firm prices but face a tougher backdrop if 2026 indeed brings oversupply and lower average prices.
China’s commodity story: steady oil, record copper
China’s commodity data today show:
- Crude and iron ore: Prices have been relatively stable in recent months, encouraging China to build inventories; iron ore imports are running well above last year and port inventories are at their highest since February. [33]
- Copper: Prices have climbed nearly 40% from April lows to record highs above $11,700, driven by strong U.S. demand and fears of new tariffs next year. [34]
This mix hints at robust global manufacturing demand but also raises concerns about over‑tight commodity marketsif growth disappoints.
Flows, volatility and the broader risk mood
Record foreign demand for U.S. stocks
Despite talk of an AI bubble and expensive U.S. valuations, overseas investors are still piling into American equities:
- Foreign private‑sector net purchases of U.S. stocks totaled about $646.7 billion in the 12 months through September — an all‑time high, according to U.S. Treasury data cited by Reuters. [35]
- International equities have actually outperformed U.S. stocks this year in local‑currency terms, but the weakening dollar and enduring belief in the U.S. AI story continue to pull capital into Wall Street. [36]
These flows help explain why U.S. indices remain near records even as central banks continue to warn about valuation and macro risks.
Volatility remains subdued… for now
The VIX volatility index sits in the mid‑teens, with the latest published close at 15.78 on December 4 — toward the lower end of its 2025 range. [37]
Low volatility supports:
- Risk‑taking in growth stocks
- Demand for call options and structured products
- Carry trades in FX and credit
But combined with the BIS “double bubble” warning and heavy positioning in U.S. equities, it also suggests markets could be vulnerable to a sharp repricing if the Fed, data or geopolitics trigger a shock.
Emerging‑market and geopolitical undercurrents
- Brazil: Local media highlight that Brazilian markets start the week after the Ibovespa plunged more than 4% on Friday, the worst daily fall in months, amid renewed political uncertainty — a reminder that idiosyncratic risks in big EMs can feed back into global risk appetite. [38]
- East Asia tensions: Reuters notes a Chinese carrier strike group conducting intense air operations near Japan, while Thailand has carried out air strikes along its border with Cambodia, events that traders are watching for potential escalation. [39]
- Russia‑Ukraine: European defense stocks have bounced recently as expectations of an imminent ceasefire faded, putting renewed focus on military spending and supply chains. [40]
So far, these geopolitical flashpoints haven’t derailed the global rally — but they remain part of the background risk that can quickly affect energy, defense and EM assets.
What stock traders should watch for the rest of the week
While today’s moves are modest, positioning is being set up now for a potentially volatile mid‑week.
Key checkpoints from here:
- Later today (Dec 8, 2025)
- U.S. factory orders and core durable‑goods figures
- 3‑year Treasury auction – weak demand could push yields higher and weigh on growth stocks
- Tuesday–Thursday
- U.S. JOLTS job openings, employment‑cost and small‑business data – fresh read on labour market tightness [41]
- Fed rate decision and dot plot on Wednesday, plus Powell’s press conference
- Decisions from BoC, SNB, RBA, Brazil’s central bank and the Philippines
- Earnings from Oracle, Adobe, Broadcom, Costco and others, with options markets primed for big moves
- Cross‑asset signals
- Whether the 10‑year Treasury yield stays near or above 4.1%
- Whether gold and equity indices continue to rise together despite BIS warnings
- Any reversal in the VIX from subdued levels
For now, the base case priced into stocks is a clean 25 bps Fed cut, still‑solid growth, and no immediate policy shockfrom other central banks. The risk is that even a small deviation from this script — a hawkish dot plot, higher yields, or an earnings disappointment from an AI bellwether — could force a rethink as markets sit near record highs.
This article is for information purposes only and does not constitute investment advice. Markets and data quoted are subject to change throughout the trading day.
References
1. www.reuters.com, 2. www.reuters.com, 3. www.reuters.com, 4. www.reuters.com, 5. apnews.com, 6. www.thetelegraph.com, 7. m.economictimes.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.rbc.com, 11. www.reuters.com, 12. m.economictimes.com, 13. www.reuters.com, 14. www.reuters.com, 15. www.rttnews.com, 16. www.rttnews.com, 17. www.investing.com, 18. www.rbc.com, 19. www.wsj.com, 20. www.wsj.com, 21. www.morningstar.com, 22. www.reuters.com, 23. www.reuters.com, 24. press.spglobal.com, 25. www.reuters.com, 26. www.reuters.com, 27. www.reuters.com, 28. www.reuters.com, 29. www.reuters.com, 30. www.globalbankingandfinance.com, 31. www.reuters.com, 32. www.eia.gov, 33. www.reuters.com, 34. www.reuters.com, 35. www.reuters.com, 36. www.reuters.com, 37. fred.stlouisfed.org, 38. www.riotimesonline.com, 39. www.reuters.com, 40. www.reuters.com, 41. www.spglobal.com
