Closing Recap 

U.S. stocks surged on Thursday, snapping a four-day losing streak for the S&P 500 in a powerful “risk-on” rally fueled by a cooler-than-expected U.S. inflation report. The Nasdaq led the charge with a 1.38% gain as a strong earnings report from Micron provided a much-needed boost to the battered semiconductor and technology sectors. All major indices finished in the green, with advancers outpacing decliners. The soft Consumer Price Index (CPI) print for November solidified market expectations for a Federal Reserve rate cut, although the timing remains a subject of debate. 

The U.S. dollar and Treasury yields both fell on the dovish data. In central bank news, the Bank of England delivered a hawkish 25-basis-point cut, while the ECB held rates steady as expected. Gold pulled back from recent highs, while Bitcoin’s volatility continued. 

Key Takeaways 

• Stocks Rally as Soft CPI Boosts Fed Cut Hopes: U.S. stocks surged, snapping a four-day losing streak for the S&P 500, after a softer-than-expected U.S.
• Cooler CPI Sparks Broad Rally: A softer-than-expected November U.S. CPI report, showing headline inflation at 2.7% y/y, ignited a strong rally across risk assets and solidified Fed easing expectations. 
• Tech Rebounds, Nasdaq Gains 1.38%: The technology sector snapped its losing streak, with the Nasdaq surging as a strong report from Micron (MU) and the dovish CPI data provided a powerful tailwind. 
• Bank of England Delivers “Hawkish Cut”: The BoE cut rates by 25 bps as expected, but a tight 5-4 vote split revealed a more divided committee than anticipated, providing some support for the pound. 
• ECB Holds, Euro Steadies: The European Central Bank held rates steady as expected, with a neutral tone that has left the Euro consolidating its recent gains. 
• Bullish S&P 500 Targets for 2026 Emerge: Despite recent volatility, major Wall Street banks like Barclays are rolling out bullish 2026 targets for the S&P 500, with some calling for a move to 7,400, citing megacap tech strength and Fed easing.
• Gold and Silver Surge on Weaker Dollar: Precious metals are rallying strongly. Gold is back above $4,360, while Silver is on a tear, up 6% this week and on track for its best year since 1979.
• Oil Steadies: WTI Crude Oil is consolidating near $56, with traders weighing geopolitical risks against a soft demand outlook.
• Bitcoin’s Wild Ride Continues: The crypto market remains extremely volatile. Bitcoin saw a massive intraday swing, first surging to $89,350 before crashing back to $84,450. 
• BoJ Hikes Rates, Yen Weakens: The Bank of Japan delivered its widely expected 25-basis-point rate hike on Friday, lifting its policy rate to 0.75%, the highest in three decades, but a dovish press conference from Governor Ueda sent the yen tumbling. 
• Yen Paradoxically Weakens on “Dovish Hike”: Despite the rate hike, the Japanese Yen has weakened, with USD/JPY rallying, as Governor Ueda’s dovish press conference and a lack of commitment to further tightening disappointed bulls.
• All Eyes on the Final Trading Days: With a slew of central bank decisions now in the rearview mirror, the market’s focus shifts to the final, liquidity-thinned trading sessions of 2025. 

Market Overview

After four straight days of selling, the bulls finally got the catalyst they were looking for. Thursday’s cooler-than-expected U.S. CPI report for November was the perfect antidote to the market’s recent anxieties, providing clear evidence that inflation is continuing its downward trend. The data immediately reinforced the market’s conviction that the Federal Reserve is on track to ease policy, even if the exact timing remains uncertain. The “risk-on” reaction was swift and broad-based, with equities and other risk-sensitive assets surging higher. Strong earnings from memory-chip maker Micron provided a much-needed micro-level boost, while the dovish macro backdrop helped to alleviate the valuation concerns that have been weighing on the sector. 

Index	Up/Down	%	Last
DJ Industrials	65.88	0.0014	47951
S&P 500	53.33	0.0079	6774
Nasdaq	313.04	0.0138	23006
Russell 2000	15.57	0.0062	2507

The benign inflation print, showing core CPI at its lowest level since early 2021, was exactly what the market wanted to see. It has reinforced the “bad news is good news” dynamic, where signs of a cooling economy are seen as a green light for more Fed rate cuts. While the central bank “Super Thursday” delivered a hawkish cut from the Bank of England and a steady hold from the ECB, the U.S. inflation data was the main event. Now, with the Bank of Japan also having delivered its widely anticipated rate hike, the market has navigated the final major risk events of the year. The stage appears set for a quiet end to 2025, though thin holiday liquidity could still lead to some unexpected volatility.

Economic Calendar 

Today is the final major trading day for many before the holiday season begins in earnest. The calendar is light, with the market’s focus on digesting this week’s slew of central bank decisions and data. Yesterday was a huge day for central bank decisions and U.S. inflation data. Data Released Yesterday / Overnight: 

• U.S. November CPI: A significant downside surprise. Headline CPI rose +2.7% y/y (vs. 3.1% exp), and the core rate fell to +2.6% y/y (vs. 3.0% exp). 
• Bank of England (BoE) Rate Decision: Cut its Bank Rate by 25 bps to 3.75% in a hawkish 5-4 vote split. 
• European Central Bank (ECB) Rate Decision: Held all key rates steady, as expected. 
• Bank of Japan (BoJ) Rate Decision: Delivered a historic 25-basis-point rate hike to 0.75%, as expected, but a dovish press conference weakened the yen. 
• UK Retail Sales (Nov): A big miss, falling -1.1% month-over-month versus a +0.3% forecast, a worrying sign for the UK consumer.

Today is the final trading day of a volatile week, with the focus on Canadian retail sales and the end-of-week positioning. Today’s Economic Calendar: 

• European Session: A light calendar, with the main release being a miss on UK Retail Sales for November. 
• U.S. Session: The only major release is the Canadian Retail Sales report. 
• 13:30 GMT – Canadian Retail Sales (Oct).

Asset Class Spotlight: FX, Commodities, Bonds & Crypto

The big story in commodities is the continued strength in precious metals. Precious metals saw some profit-taking after their recent spectacular run. February gold futures settled down -0.21% at $4,364.50 an ounce, while silver and platinum also eased from near-record highs. Silver and Platinum are also on a tear, with both up significantly on the week and on track for their best years since 1979. Crude oil prices were slightly higher, with WTI settling at $56.15 a barrel, but the market remains under pressure from concerns over a potential Russia-Ukraine peace deal. 

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.21	0.0038	56.15
Gold	-9.4	-0.0021	4364.5
EUR/USD	-0.0013	-0.0011	1.1726
USD/JPY	-0.13	-0.0008	155.54
Bitcoin	600	0.007	87121
10-Year Note Yield	-0.033	-0.0079	0.04118

The currency market is seeing a significant repricing, with the Japanese Yen paradoxically weakening after a rate hike, while the Pound holds its ground despite a dovish surprise. The U.S. dollar is attempting to stabilize after being hit hard by the soft CPI data, while the yen is giving back some of its recent gains after a “dovish hike” from the BoJ. 

• GBP/USD: The pair is holding steady below 1.3400, digesting the BoE’s “hawkish cut.” The tight vote split has forced investors to scale back bets on aggressive easing in 2026, providing some support for the pound, offsetting the weak retail sales data. 
• EUR/USD: The euro has retreated slightly after a packed data day, closing down for its 3rd consecutive day, trading near 1.1720. The ECB’s neutral stance has left the pair to be driven by broader U.S. dollar sentiment. The pair is consolidating its recent gains as the market assesses the implications of a steady ECB and a dovish Fed. 
• USD/JPY: The yen is the main loser, with the pair rallying back towards the mid-156.50s. The BoJ’s widely expected rate hike was a “sell the news” event, as Governor Ueda’s dovish press conference disappointed yen bulls who were hoping for a more hawkish signal. 

Cryptocurrencies: After another day of wild volatility, the crypto market is attempting to stabilize. Bitcoin is trading near the $87,000 level, on track for a weekly loss but finding some relief from the broader improvement in risk sentiment. However, the market remains fragile, with thin holiday liquidity amplifying caution. U.S. Treasury yields fell after the soft CPI data reinforced the case for Fed easing. The benchmark 10-year yield dropped 3.1 basis points to 4.12%, reflecting the market’s increasingly dovish outlook for the Federal Reserve. 

Looking Ahead 

With the final major risk events of the year now in the rearview mirror, the market is heading into the holiday season with a decidedly dovish tailwind. The cooler-than-expected U.S. inflation data has likely sealed the deal for the bulls, providing a strong fundamental reason for the year-end “Santa Claus Rally” to continue. However, with liquidity set to dry up significantly in the final trading days of the year, traders should remain vigilant for any unexpected headlines that could spark outsized moves in a thin market.

What to Watch Today

• The BoJ’s “Dovish Hike” Aftermath: The Yen’s sell-off after a rate hike is a major counterintuitive move. Traders will be watching to see if this weakness persists or if the market re-evaluates the BoJ’s long-term tightening path. 
• The Dovish Repricing in the U.S.: The soft CPI data has all but sealed the deal for a sustained Fed easing cycle. Goldman Sachs is now calling for cuts in December, March, and June. This is the primary driver of the current “risk-on” mood. 
• The BoE’s Hawkish Surprise: The 5-4 vote at the BoE was a significant hawkish signal. This has put a floor under the Pound and creates a more balanced outlook for the currency heading into 2026. 
• Gold and Silver’s Parabolic Run: The precious metals rally is historic. With Goldman Sachs now calling for gold at $4,900, the narrative is incredibly strong. However, the moves are becoming extremely extended, and the risk of a sharp pullback on profit-taking is very high.