United States
Wall Street began the holiday-shortened week on a strong footing, extending the bullish momentum that has carried US equities through most of the year. A broad-based advance saw more than 400 stocks in the S&P 500 close higher, pushing the index closer to record territory and erasing its December losses. The benchmark rose 0.6% to around 6,880 and is now on track for an eighth consecutive monthly gain, its longest winning streak since 2018.
Gains were led by large technology stocks, with Tesla and Nvidia among the standout performers, while smaller companies also participated, with the Russell 2000 climbing 1.2%. The Nasdaq 100 added 0.5% and the Dow Jones Industrial Average rose 0.5%, highlighting the breadth of the rally.
Bond markets were comparatively steady. The yield on the 10-year US Treasury edged two basis points higher to 4.16%, while the two-year yield rose to 3.50%. The US dollar softened, ending a three-day advance, as risk appetite improved.
Commodities added to the positive tone, with oil rising sharply and precious metals surging to record highs amid ongoing geopolitical tensions. West Texas Intermediate crude gained 2.5% to USD 57.94 a barrel, while spot gold jumped 2.4% to USD 4,442.78 an ounce.
Attention remains firmly on the Federal Reserve as investors price in two interest-rate cuts next year. Recent economic data have reinforced confidence that growth remains resilient, with Bloomberg Economics estimating US GDP expanded at more than 3% in the third quarter. Equity positioning has continued to rise, with fund managers maintaining historically low cash levels, reflecting confidence that the rally can extend into the new year.
Europe
European equity markets were more subdued, though they continue to hold onto solid monthly gains. The Stoxx Europe 600 Index closed little changed, leaving it on track for a sixth consecutive monthly advance. Mining stocks led gains as commodity prices rose, while insurance stocks also performed well. In contrast, autos and food and beverage stocks lagged.
Geopolitics remained a key focus for European investors after the US intensified its blockade on Venezuela, supporting commodity prices. Europe’s benchmark index has hit multiple all-time highs in recent weeks, buoyed by optimism around further policy easing and resilient US growth. However, with a year-to-date gain of around 16%, European equities have still underperformed their global peers.
Among individual movers, Danish wind energy group Orsted fell sharply after the US administration suspended leases for several wind farms under construction off the East Coast, citing national security concerns. Elsewhere, Abivax surged after reports of potential acquisition interest, while Norway’s Bonheur advanced following a deal involving its wind turbine installation business.
European government bond yields were broadly stable. Germany’s 10-year yield finished little changed at 2.90%, while Britain’s 10-year yield rose one basis point to 4.54%.
Australia
Australian shares joined the global rally, with the S&P/ASX 200 climbing 0.9% to a five-week high of 8,699.90. The index briefly traded above 8,700 during the session, its highest level since mid-November, as optimism around global interest-rate relief and surging commodity prices lifted sentiment.
All 11 sectors finished higher, led by energy and materials. Copper and gold both hit record levels, driving strong gains among miners. BHP and Rio Tinto rose alongside gold producers, while uranium stocks also saw outsized gains. Energy shares were similarly buoyant as oil prices climbed more than 2%.
Retail stocks delivered mixed performances ahead of Boxing Day, while several individual companies drew investor attention. DroneShield rose after introducing a mandatory minimum shareholding policy for executives and directors. Liontown advanced after completing open-pit mining at its Kathleen Valley lithium operation, while NextDC jumped following an update showing a sharp rise in contracted utilisation. Seven West Media fell after shareholders approved a takeover that will see the company delisted.
ASX 200 futures were pointing modestly higher ahead of the next session, suggesting a steady open despite reduced holiday trading volumes. The Australian dollar strengthened, rising 0.7% to around US 66.56 cents.
Commodities and currencies
Commodity markets were a major driver of global asset performance overnight. Oil prices surged on the back of geopolitical tensions, while precious metals extended their strong run. Spot gold and silver both pushed to fresh all-time highs, reinforcing their appeal amid global uncertainty.
Industrial metals were also firm, with copper climbing to record levels near USD 12,000 a tonne, supporting mining shares across Australia and Europe. Iron ore edged higher to USD 104.90 a tonne.
In currency markets, the Bloomberg Dollar Spot Index fell 0.4%, allowing the euro and pound to strengthen. The euro rose to USD 1.1757, while sterling climbed to USD 1.3457. The Japanese yen also firmed, trading at around 157 per US dollar.
Cryptocurrencies were comparatively steady. Bitcoin edged up 0.2% to USD 88,346, while Ether rose 0.4% to just under USD 3,000.
Economic Calendar
AU:
- RBA Policy Minutes 11:30
US:
- ADP Employment 00:15
- GDP (QoQ Q3) 00:30
This article was written by Calvin Curdie, Rivkin Securities Pty Ltd. Enquiries can be made via [email protected] or by phoning +612 8302 3632.
