In reviewing the markets as of December 5th, 2025, 11:30 PM, using data from Investing.com, I’ve noticed several driving trends that continue to shape investor sentiment and define macroeconomic movements. What stands out most prominently is the sustained resilience of U.S. equities, particularly the tech-heavy NASDAQ, which extended its rally following another series of dovish signals from the Federal Reserve.
Today’s headlines were dominated by the Fed’s commentary hinting at a “policy shift phase,” with Chair Powell reiterating openness to rate cuts as early as Q2 2026 should inflation remain anchored around or below the 2% target. This dovish pivot has naturally bolstered market confidence. The S&P 500 closed just shy of breaking its all-time high, while the Dow Jones Industrial Average touched new yearly highs. The bond market reacted accordingly, with the U.S. 10-year Treasury yield sliding below the closely watched 4.00% psychological level for the first time in several weeks, further confirming investor belief that rate hikes are firmly off the table.
One of the most notable movers today was the semiconductor sector. Nvidia surged over 3.8%, while AMD and Broadcom also posted strong gains. Much of this was driven by optimism surrounding the continued exponential growth of AI infrastructure investment globally. A fresh report from Taiwan Semiconductor Manufacturing Company (TSMC) about increased 3nm chip orders added to the bullish sentiment, pushing chip stocks even higher and cementing their leadership position in the rally.
Another trend that caught my eye is the underperformance of energy stocks despite OPEC+ reaffirming production cuts. Brent crude fell below $76 a barrel — its lowest since June — as traders increasingly price in global demand weakness, particularly from China. Industrial data today from Beijing missed expectations once again, showing November export growth only marginally up, despite recent fiscal stimulus. This triggered further capital outflows from Chinese equities, with the CSI 300 index dropping nearly 1.2% on the day.
In the FX market, the U.S. dollar index (DXY) dropped slightly, hovering near 103.60 after dipping from recent 104+ levels. The euro and British pound gained mildly as traders digest more hawkish ECB and BoE rhetoric, though neither central bank appears ready to act in the near term. Interestingly, the Japanese yen also rebounded, suggesting that traders may be anticipating a BoJ policy normalization in 2026. This aligns with an ongoing narrative of the global central bank divergence starting to narrow after a multi-year period of ultra-accommodative Japanese policy versus aggressive tightening elsewhere.
Gold, acting as a forward-looking inflation hedge, briefly crossed above $2,080 per ounce, an eight-month high, before moderating later in the session. This move seems partially driven by lower yields and the general softening of the dollar. From my perspective, the precious metal’s recent strength is not only a reflection of inflation expectations but also increasing geopolitical hedge demand — particularly after tensions escalated again in the Red Sea following Houthi-linked attacks on commercial vessels.
All in all, the landscape is undeniably favoring risk assets in the short term. The market is increasingly embracing a “soft landing” narrative for the U.S. economy, reinforced by a cooling labor market that isn’t collapsing and inflation numbers that appear contained. That said, extreme positioning in some sectors, especially tech, is beginning to show signs of overextension — something I am watching closely.