Metal prices are rising, and US stocks are taking off. When will the market experience a Christmas rebound?

Geopolitical tensions, rising expectations of Fed rate cuts, and a weakened US dollar have combined to usher in a comprehensive boom in the precious metals market. Gold broke through the $4,400 mark, reaching a high of $4,449, with a single-day increase of 2.43%; silver surged even more, briefly hitting $69.44, approaching the $70 level, with a 24-hour gain of 2.82%; London copper futures rose to $11,996.18 per ton, up 1.01%; spot palladium hit a three-year high, reaching $1,800.85 per ounce, up 4.86%; spot platinum also broke new highs at $2,096.81 per ounce, up 6.07%.

In energy, the lack of substantive breakthroughs in US-Ukrainian peace negotiations has boosted crude oil demand expectations. WTI crude oil rose over 2%, trading at $57.95 per barrel. Market optimism for the Christmas holiday season has increased, panic sentiment has eased significantly, and the VIX fear index fell 5.5%, hitting a more than one-year low.

The Logic Behind the Three Consecutive Gains in US Stocks

Boosted by improved market risk sentiment, US stocks rose across the board for the third consecutive trading day. The Dow increased by 0.47%, the S&P 500 rose by 0.64%, the Nasdaq gained 0.52%, and the China Golden Dragon Index also advanced by 0.58%. European stocks were relatively stable but slightly weak, with the UK FTSE 100 down 0.32%, France CAC 40 down 0.37%, and Germany DAX 30 barely falling 0.02%.

Goldman Sachs strategist Ben Snider’s latest outlook is noteworthy. He predicts that the Russell 2000 index, which tracks US small-cap stocks, could rise by 10% next year, approaching the 12% expected return of the S&P 500. He believes that factors such as fiscal policy adjustments, accelerated commercialization of artificial intelligence, and increased M&A activity will provide abundant investment opportunities in small-cap stocks. This offers clear guidance for the future market direction.

Tech Giants Intensify AI Investment Race

Popular tech stocks continued to rise, with Nvidia(Nvidia) closing up 1.5%, Tesla(Tesla) up 1.6%, Oracle(Oracle) rebounding 3.3% to recent highs, and Micron(Micron) leading chip stocks with a 4% increase.

Alphabet(Google’s parent company) announced a major acquisition. The company has reached a final agreement to acquire data center and energy infrastructure firm Intersect Power for $4.75 billion in cash, along with assuming its related debts. Alphabet CEO Sundar Pichai(Sundar Pichai) stated that this move will help expand the company’s energy capacity and reimagine energy solutions. Intersect Power, supported by private equity firm TPG, is a clean energy developer with $15 billion in operational or under-construction assets. By 2028, its total installed capacity is expected to be about 10.8 GW, more than 20 times the power output of Hoover Dam, earning it the nickname “Disney of Energy” in Texas.

This deal reflects the trend of large tech companies competing to expand into energy. As generative AI drives electricity demand soaring, the pressure on the US power grid has increased, prompting tech giants to ramp up investments in energy companies.

Cryptocurrency Short-term Volatility and Exchange Rate Focus

The cryptocurrency market shows obvious short-term fluctuations. Bitcoin has fallen 0.39% in 24 hours, currently at $93,390; Ethereum has risen 2.42% in 24 hours, currently at $3,260. In Hong Kong stocks, the Hang Seng Index futures closed at 25,909 points, up 95 points, and the China Enterprises Index futures closed at 8,976 points.

It’s worth noting that crypto assets are becoming more sensitive to RMB exchange rates. As the US dollar index fell 0.48% to 98.24, USD/JPY declined 0.44%, EUR/USD rose 0.45%, and the RMB’s relative strength has supported pairs like BTC/RMB. These foreign exchange market changes are indirectly influencing crypto pricing logic.

The Fed’s Rate Cut Outlook Next Year and Economic Prospects

Fed Governor Stephen Miran(Stephen Miran) issued an important signal, indicating that if the Fed does not continue to cut rates next year, it could risk triggering an economic recession. He emphasized that rising unemployment should be a trigger for Fed officials to continue rate cuts, suggesting that unemployment may have already exceeded expectations. Miran’s term ends in January next year, and since joining the Fed in September, he has advocated for more substantial rate cuts. This statement reflects internal divisions within the Fed on policy direction, and market optimism about rate cuts next year has increased.

Complex Geopolitical and Energy Policy Battles

Ukrainian President Zelensky confirmed that the Ukrainian delegation has concluded negotiations with the US in Miami and returned to Ukraine. Although all key work on the 20-point “peace plan” draft has been completed and the overall framework established, no substantive breakthroughs have been achieved in this round of talks. Moscow still demands Ukraine cede parts of Donbas that cannot be retaken by military means, and major disagreements remain on critical issues.

On energy policy, the Trump administration continues to pressure Venezuela, seeking to seize oil tankers entering and leaving the country. This move aims to cut off Maduro’s main revenue source. Industry experts warn that if Venezuela cannot export oil, state oil company PDVSA will be forced to shut down oil wells, and storage tanks will be filled with stranded oil.

New Developments and Policy Risks in the Chip Supply Chain

Nvidia has informed Chinese clients that it plans to start shipping its second most powerful AI chip, H200, before the Lunar New Year holiday in mid-February. The initial shipment is expected to include 5,000 to 10,000 chip modules, equivalent to 40,000 to 80,000 H200 AI chips. The company also plans to increase new chip capacity, with new production starting to accept orders from the second quarter of 2026.

However, a key risk is that Beijing has yet to approve any H200 purchases, and the entire plan depends on final approval from the Chinese government. Trump stated this month that Washington would allow such sales but impose a 25% fee. This means the first H200 deliveries to China face policy uncertainties.

Quiet Changes in International Reserves Structure

The latest data from the IMF(IMF) shows that in the third quarter, the US dollar’s share of global reserves declined to 56.92%. In comparison, at the end of the second quarter, it was 57.08%, showing a gradual decline. Meanwhile, the share of euro-denominated reserves increased from 20.24% to 20.33%, and yen-denominated reserves rose from 5.65% to 5.82%. These changes reflect a long-term trend of global reserve diversification, with US dollar dominance slowly but steadily eroding.

The US 10-year benchmark bond yield is about 4.16%, up 2 basis points from the previous trading day, indicating complex market expectations for Fed policy.

Wind Power Projects Halted, Dragging Down Clean Energy Sector

The US government announced the suspension of offshore wind projects off the Virginia coast and four other projects on the East Coast, as well as halting leasing for Vineyard Wind 1 in Massachusetts, Revolution Wind in Rhode Island, Sunrise Wind and Empire Wind 1 off Long Island. The developer, Dominion Energy(D.US), saw its stock drop over 5%, reflecting market concerns about the outlook for the wind power industry. This policy shift has caused significant disruption to the clean energy sector.