Risk appetite surges significantly, driving multi-asset rallies; FED rate cut expectations become the key catalyst

Monday (November 24) saw a confluence of positive news, leading to a significant rebound in global market risk appetite. The “Genesis Plan” signed by Trump, progress in Ukraine peace negotiations, and a phone call between Chinese and US leaders all sent positive signals. Coupled with dovish hints from Federal Reserve officials, these factors collectively shifted market sentiment from caution to optimism. The VIX fear index, which reflects market volatility expectations, dropped by 12.4%, becoming the most direct indicator of the change in risk preference.

Amid this upward wave, both traditional and digital assets performed well. Gold broke through the $4100 level, closing at $4134.7 per ounce, up 1.73%. Bitcoin continued its recovery, rising 0.22% in 24 hours, currently trading at $87.67K; Ethereum also showed strong performance, surging within 24 hours, indicating positive market expectations for the FED meeting outcome.

Stock markets all strengthened, with tech giants leading the rally

The three major US stock indices all rose, with the Nasdaq leading at 2.69%, the S&P 500 up 1.55%, and the Dow Jones up 0.44%. Chinese-related indices also performed well, with the China Golden Dragon Index climbing 2.82%. In Europe, the DAX 30 rose 0.64%, the CAC 40 increased 0.29%, and the FTSE 100 gained 0.05%.

The seven major US tech giants all advanced, with Google gaining over 6%, pushing its market cap to $3.84 trillion, as investors grew more optimistic about its AI advantages. Tesla rose 6.8%, while Apple, Amazon, and Meta increased between 1.6% and 3.2%, and Nvidia rose 2.1%. Additionally, pharmaceutical company Merck gained 2.7%, making it the strongest component of the Dow.

Dovish Fed officials reinforce expectations of rate cuts

Meanwhile, Federal Reserve Governor Christopher Waller reiterated support for a rate cut in December, stating that tariffs’ impact on inflation is manageable and temporary. Waller further indicated that from a dual-mandate perspective, the labor market remains the main concern, and a rate cut should occur in December, with subsequent decisions made at each meeting. He added that the revisions to employment data for September and October are substantial, and short-term labor market improvements are unlikely.

Notably, three Fed governors appointed by Trump—Boman, Milan, and Waller—have all signaled support for a December rate cut at the upcoming FED meeting. Last week’s dovish stance by Williams suggests he will join the dovish camp, and Cook also leans dovish. The futures market reflects investor optimism, with about a 70% probability of a rate cut in December based on the FED meeting outcome.

Policy stimulus and AI investment drive growth expectations

The “Genesis Plan” executive order signed by Trump aims to accelerate scientific discovery through AI. The Department of Energy will establish an AI experimental platform, integrating US supercomputers and unique data assets. This move reflects the government’s strategic focus on AI and has boosted investor confidence in the tech sector.

Morgan Stanley strategist Michael Wilson believes the recent correction in US stocks is nearing its end, and the bank remains optimistic about next year’s stock market. The report suggests that short-term weakness could be a good entry point, favoring consumer discretionary, healthcare, financials, industrials, and small-cap stocks. The strategist projects the S&P 500 will rise to 7,800 points in a year, about 18% above current levels.

Deutsche Bank’s research division is even more optimistic. Jim Reid, head of global macro and thematic research, predicts a strong rally driven by AI, with the S&P 500 potentially surpassing 8,000 points before the end of the year. The bank’s year-end target of 8,000 points is particularly noteworthy given its excellent track record of forecasts.

International negotiations foster peace prospects

Regarding Ukraine peace talks, Ukrainian and US officials drafted a revised peace framework after Geneva talks, expressing progress and a willingness to continue efforts in a joint statement. Zelensky welcomed the progress but warned that Russian demands on eastern territories could threaten sovereignty. Although the Kremlin indicated support for adjustments, significant disagreements remain between Moscow and Kyiv on territory and security guarantees.

Commodities and forex markets

Oil markets performed well, with WTI crude rising 1.57% to $58.8 per barrel. The US 10-year Treasury yield is around 4.03%, down 3 basis points from the previous trading day, reflecting expectations of rate cuts. The US dollar index slightly declined by 0.01% to 100.1, USD/JPY rose 0.33%, and EUR/USD increased 0.07%. In Hong Kong stocks, the Hang Seng night futures closed at 25,874 points, 158 points higher than yesterday’s close of 25,716.

Major tech developments

OpenAI launched a free shopping research tool, allowing users to receive personalized shopping guides via ChatGPT. The tool will be available to all free and paid users with near-unlimited access before January next year.

Apple has made rare layoffs, cutting dozens of sales positions. The move aims to streamline product delivery to enterprises, schools, and governments, with affected employees notified over the past few weeks.

Amazon Web Services(AWS) will invest up to $50 billion to build customized AI and high-performance computing infrastructure for the US government, adding nearly 1.3 gigawatts of computing capacity, aiming to maintain US leadership in artificial intelligence.