December 1, 2025

Markets Eye 'Santa Rally' as Fed Rate Cut Looms; Tech Stocks Tumble & Gen Z Bets on Crypto

Market Snapshot

📈 S&P 500: 6,849 (+0.54%)
📈 Dow Jones Industrial Average: 47,716 (+0.61%)
📈 NASDAQ Composite: 23,366 (+0.65%)
📈 US 10-Year Treasury: 4.02% (+0.02%)
📈 Gold: $4,219 (+1.51%)
📈 Bitcoin: $90,962 (+0.26%)
📈 Ethereum: $3,041 (+0.28%)

Global Economy & Markets

Investors are entering the final month of the year with cautious optimism, anticipating a traditional 'Santa Claus rally'. This sentiment is largely fuelled by expectations that the U.S. Federal Reserve will announce a 25-basis-point interest rate cut at its 10 December meeting, with markets pricing in an almost 90% probability of such a move. In the US, a proposed $4.1 trillion spending package, the 'One Big, Beautiful Bill Act', is expected to create significant tailwinds for domestic manufacturing, defence, and energy sectors.

However, potential headwinds are tempering this optimism. The World Trade Organization (WTO) is forecasting a sharp slowdown in global trade growth to just 0.5% in 2026, citing the impact of tariffs. Economic data from Asia is mixed, with China's manufacturing activity unexpectedly contracting in November due to soft domestic demand. In contrast, India's economy accelerated, growing 8.2% year-on-year in the September quarter, driven by strong manufacturing and construction sectors. Reflecting this uncertainty, global equity funds recently saw outflows of $4.48 billion, ending a nine-week buying streak.

Corporate & Sector News

Technology

Technology stocks experienced a downturn in November, with the tech-heavy Nasdaq Composite snapping a seven-month winning streak. Investors are scrutinising high valuations, particularly in the artificial intelligence sector. Notable decliners for the month included Super Micro ($SMCI) and Oracle ($ORCL), which fell 37% and 22% respectively, while Palantir dropped around 16%. In a positive development for the chip industry, Intel ($INTC) shares rallied over 10% on speculation of a new partnership with Apple ($AAPL) to use its foundry for M-series chips. Elsewhere, Dutch chip firm Nexperia has publicly urged its China unit to help restore supply chain operations, warning that customers are facing imminent production outages.

Aviation

Airbus is facing multiple challenges. The company ordered immediate software fixes for 6,000 of its A320-series aircraft due to a glitch linked to potential data corruption from solar flares. The issue grounded more than half the narrow-body fleet and contributed to over 12,000 flight delays in the US during the Thanksgiving holiday. Separately, the company is also contending with an industrial quality issue affecting fuselage panels on dozens of its A320-family aircraft, resulting in some delayed deliveries. There are no indications the manufacturing flaw is affecting planes currently in service.

Retail, Entertainment and Pharmaceuticals

US consumer spending remained robust over the Thanksgiving holiday. Black Friday online sales reached a record $11.8 billion, and overall retail sales (excluding cars) rose 4.1% year-on-year, with e-commerce jumping 10.4%. Categories with deep discounts such as makeup and home decor sold well, while active apparel and luxury clothing were top performers.

The entertainment sector also saw strong results. Walt Disney's Zootopia 2 dominated the Thanksgiving box office, securing over half a billion dollars in global ticket sales in its opening weekend. The holiday weekend brought in an estimated $294 million overall, poised to be one of the best in history. IMAX reported a new all-time high with $40.8 million in global ticket sales over the five-day period.

In the pharmaceutical sector, Eli Lilly announced it is lowering the cash cost of its popular weight-loss drug Zepbound on its direct-to-consumer platform, making single-dose vials available for between $299 and $449 a month, down from a previous range of $349 to $499.

Labour, Controversial Ventures, and Niche Industries

Starbucks is facing escalated strike action from its workers' union, affecting over 120 stores across 85 cities during its busiest season. Despite the labour unrest, the company's stock ($SBUX) gained over 5% in the preceding week.

A controversial athletic competition, the Enhanced Games, which permits the use of performance-enhancing drugs, is set to go public via a $1.2 billion SPAC merger. Backed by investor Peter Thiel, the venture has drawn criticism from global athletics bodies.

Meanwhile, family-owned businesses providing memorial products like gravestones report facing dual challenges from the rising popularity of cremation and increased costs due to tariffs on imported granite.

Commodities and Cryptocurrency

Amid economic uncertainty, silver prices reached new record highs, notching its longest streak of positive months since 1983 as some investors turned to safe-haven assets.

Bitcoin experienced significant volatility, first rebounding to over $90,000 before dropping back below the key level, triggering an 'Extreme Fear' sentiment among traders. Despite the price swings, institutional adoption continues to grow, with BlackRock's Bitcoin ETFs accumulating over $70 billion in assets and holding over 3% of Bitcoin's total supply. After several weeks of outflows, spot crypto ETFs saw their first positive inflows during Thanksgiving week.

The sector is also maturing on a regulatory and infrastructure front. The UK has confirmed new crypto reporting rules starting in 2026, requiring exchanges to collect customer transaction data for tax purposes. In finance, Visa is expanding its stablecoin settlement capabilities across Europe, the Middle East, and Africa. However, there are signs of consolidation, with European firm CoinShares withdrawing its SEC filings for several crypto ETFs, citing thin profit margins.

Economic pressures are reshaping the financial behaviour of younger generations. Priced out of the housing market, many in Gen Z are reportedly forgoing traditional wealth-building strategies. Research suggests that when homeownership seems unattainable, young adults reduce their work efforts and take greater financial risks. This is reflected in surging revenue from sports betting and an increase in young people opening investment accounts for crypto speculation.

This demographic is also a key driver of the subscription economy, fuelling platforms like Spotify and Netflix. In a related trend, social media usage is fragmenting. A recent study shows Reddit's usage among US adults has grown to 26%, while usage of X (formerly Twitter) has declined to 21%.

NOTE: This content is for informational and educational purposes only and does not constitute financial advice. Always do your own research. Not financial advice (NFA).