Today, as I monitored the markets on December 3rd, 2025, several key developments stood out to me, reflecting both underlying macroeconomic forces and sector-specific catalysts. One of the most striking features of today’s trading session was the tech sector’s renewed strength, particularly among AI and semiconductor stocks, which saw a strong rebound following last week’s mild correction. This rally was underpinned by unexpectedly strong factory orders in the U.S., coupled with robust data out of Asia showing increased chip exports, especially from South Korea and Taiwan. These indicators reinforced the market’s belief that global demand for semiconductors remains resilient – a major plus for names like Nvidia, AMD, and ASML, which all closed the day solidly in green.
Adding to the tech-fueled optimism was a notable fall in the U.S. 10-year Treasury yield, which dropped to 4.05% after touching 4.17% last week. The retreat in yields was primarily driven by comments from Fed officials suggesting that inflationary pressure is cooling faster than expected. In particular, Federal Reserve Governor Lisa Cook’s remarks about the potential for rate cuts in mid-2026 were received positively by equity markets, pushing the S&P 500 and Nasdaq Composite both higher by over 1.3% on the day.
We also saw a strong performance in the energy sector, driven in part by a sudden spike in crude oil futures. Brent crude closed up over 2.1% at $84.30 per barrel, reacting to a combination of OPEC reaffirming their supply cuts and geopolitical tensions resurfacing in the Middle East, particularly near the Strait of Hormuz. The market seems to be pricing in a potentially tighter oil market heading into Q1 2026, which benefitted stocks like ExxonMobil and Chevron, each rallying over 2%.
On the flip side, the utilities and consumer staples sectors underperformed, largely due to rotation out of defensive sectors as risk appetite returned. Investors clearly favored growth over safety today, as reflected in the strong bid across speculative assets including high-beta tech and cryptocurrencies. Bitcoin surged above $45,000 for the first time since early 2022, riding on growing institutional interest and reports that several U.S. pension funds are beginning to allocate small percentages of their portfolios to digital assets.
From a personal standpoint, what resonated most with me was the market’s reaction to the services PMI data, which came in at 52.8 – above forecasts – signaling a still-expanding services economy. This, along with the upward revision in Q3 GDP growth (from 4.7% to 5.1%), gives a clear signal that the U.S. economy remains robust heading into year-end despite tight credit conditions. I interpret these signals as supportive of equities in the medium term, particularly in sectors tied to capital expenditure and innovation.
Altogether, today’s market action exhibited a strong risk-on tone, affirmed by breadth in equity gains, falling volatility (VIX below 13), and increased institutional buying volumes. While uncertainties remain around the timing and cadence of the Fed’s policy pivot, today reaffirmed my view that the path forward, though not without bumps, is increasingly leaning towards recovery and cautious optimism in equity markets.