Category: 3. Business

Markets surge despite tech sector shake-up

United States (US) stock markets finished higher on Friday, buoyed by growing confidence that the Federal Reserve (Fed) will cut rates at its 10 December Federal Open Market Committee (FOMC) meeting. In a holiday-shortened week, the Nasdaq 100 surged 4.93%, the S&P 500 gained 3.73%, and the Dow Jones added 1,471 points, or 3.18%.

While all three indices ended the week positively, November’s overall performance was mixed. The S&P 500 and the Dow Jones posted monthly gains, but the Nasdaq 100 snapped a seven-month winning streak, falling by 1.64% in November.

This was largely due to a 12.59% drop in index heavyweight NVIDIA to $177.00, marking its worst month since March. Investors rotated out of the AI chip leader into Alphabet, which surged 13.59% last month to $320.12.

The switch, which appears to have further to run, is being driven by Google Cloud’s 34% revenue surge, fuelled by explosive tensor processing unit (TPU) demand and further boosted by the recent Gemini 3 launch – Google’s most capable multimodal model, optimised for TPU clusters and instantly rolled out across Search.

Key data releases this week

Looking ahead, this week will feature the following releases:

We will monitor the ISM services PMI closely (previewed below), given that services account for approximately 70% – 75% of US gross domestic product (GDP) and the insights it provides into the current state of the labour market.

Although this week is a Fed blackout period, a few key speaking engagements are scheduled: Powell is set to speak on Monday at a memorial event, while Bowman will testify before the House Financial Services Committee on Thursday.

ISM services PMI

Date: Thursday, 4 December at 2.00am AEDT

October’s ISM services PMI delivered a strong upside surprise, rising to 52.4 from 50.0 in September and exceeding consensus expectations of 50.8, the strongest expansion since February 2025.

The only notable weak spot was employment, which remained in contraction at 48.2 (though slightly improved from September’s 47.2), with respondents continuing to express caution around headcount growth despite broader improvement.

Attention now turns to the November release. Consensus anticipates a modest increase to 52.7, but markets will be particularly focused on whether employment weakness persists. If it does, it will reinforce the roughly 86% probability currently priced in for a 25 basis point (bp) rate cut at the 10 December FOMC meeting.

ISM services PMI chart

By Megumi Fujikawa

  The Bank of Japan will thoroughly discuss the possibility of an interest-rate increase at its upcoming meeting, Gov. Kazuo Ueda said, stoking hopes that it could resume monetary tightening this year. 

  The central bank will pay special attention to the outlook for wage increases, he said in a speech to business leaders Monday in Nagoya, central Japan. 

  Sticky inflation backs the case for higher rates, but as living costs rise policymakers want to see commensurate growth in wages. 

  Ueda said the bank is actively collecting information regarding firms' stance toward pay increases ahead of its next policy-setting meeting scheduled for Dec. 18-19. 

  At that meeting--the final one of the year--the BOJ "will consider the pros and cons of raising the policy interest rate and make decisions as appropriate," Ueda said. 

  While policymakers at the central bank have signaled that a rate hike is likely in the near future, market participants and economists have been divided on when it will happen. 

  Persistent inflation suggests that conditions are becoming ripe for the central bank to make a move, but some economists say Prime Minister Sanae Takaichi's preference for expansive economic policies complicates the path to monetary tightening. 

  This tension, combined with lingering uncertainty over the full impact of U.S. tariffs and the need for inflation expectations to become firmly anchored, has split views on when the BOJ will act next. 

  But after Ueda's remarks on Monday, markets seem to be leaning toward a December hike. The yen recovered against the dollar, reaching around 155.50 in morning trade after weakening to near 157.90 recently. The 10-year Japanese government bond yield rose to 1.850%, the highest since June 2008. 

  In response to the speech, Capital Economics changed its call for a January rate hike, now expecting the BOJ to lift its policy rate to 0.75% in December. 

  "If the bank does indeed raise its policy rate in a couple of weeks, we'd still expect two more rate hikes in 2026," it said in a note. 

  Ueda said raising rates at an appropriate speed won't put the brakes on Japan's economy--rather, it would take the foot off the accelerator enough to achieve growth and price stability. 

  Gradually adjusting interest rates "will ultimately lead to the success of the efforts undertaken by the government and the bank thus far," he said. 

  Write to Megumi Fujikawa at megumi.fujikawa@wsj.com 

  (END) Dow Jones Newswires

  November 30, 2025 21:20 ET (02:20 GMT)
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