Markets Rally as Nasdaq Hits Record High, AUD and GBP Face Headwinds Amid Global Trade Concerns | Daily Market Analysis

Key events:

• USA - JOLTS Job Openings (Oct)

The S&P 500 and Nasdaq began December on a strong note, hitting fresh record highs following a remarkable November. The S&P 500 gained 0.2%, closing at a historic 6,046.3, while the Nasdaq surged 1% to end at 19,403.58, another record. In contrast, the Dow Jones Futures dipped 0.29%, shedding 128 points in the session.

Intel Corporation (NASDAQ: INTC) started the day positively but eventually reversed its gains, closing slightly below the flatline. The company announced the resignation of its CEO, Pat Gelsinger, after a challenging tenure marked by declining shares and an inability to stay competitive in the artificial intelligence race.

Meanwhile, Tesla Inc. (NASDAQ: TSLA) extended its recent rally, climbing over 3% following an upgrade from Roth MTM, which raised the stock to "buy" from "neutral." Analysts pointed to optimism surrounding CEO Elon Musk's strong relationship with President-elect Donald Trump, which they believe could provide strategic advantages for the electric vehicle maker.

In currency markets, the Australian Dollar struggled, falling to 0.6470 during early European trading on Tuesday. The strengthening US Dollar, which reached a three-day high, weighed heavily on the Aussie. Fears of renewed global trade disruptions under President-elect Trump added further pressure. Nevertheless, the AUD found some support from hawkish remarks by Reserve Bank of Australia Governor Michele Bullock. Bullock emphasized that core inflation remains elevated, reducing the likelihood of near-term interest rate cuts, which helped limit the currency's downside.

The GBP/USD pair faced similar challenges, trading defensively below the mid-1.2600s during the Asian session on Tuesday. Data from the British Retail Consortium (BRC) revealed a 3.3% decline in annual retail sales for November, the weakest figure since April. While the timing of Black Friday sales played a role, the data reflected declining consumer confidence. Additionally, persistent geopolitical tensions, including the ongoing Russia-Ukraine war, drove demand for the safe-haven US Dollar, putting additional pressure on the Pound. However, tempered expectations for further Bank of England rate cuts, supported by higher-than-expected inflation in October, provided a floor for the currency.

GBP/USD daily chart

Gold prices also struggled to find direction on Tuesday, trading within a narrow range near $2,620. The metal faced headwinds from a stronger US Dollar, buoyed by expectations of a less dovish Federal Reserve. Concerns about escalating trade tensions under the Trump administration offered some support to gold as a safe-haven asset. Investors remained focused on US economic data, such as the ISM Manufacturing PMI, which rose to 48.4 in November, signaling cautious optimism about the incoming administration's pro-business policies. Despite this, yields on the benchmark 10-year US Treasury note lingered near their lowest levels since late October, limiting the downside for non-yielding assets like gold.

In the Japanese Yen market, the currency continued to decline against the US Dollar, with the USD/JPY pair climbing past the critical 150.00 level. However, speculation about a potential interest rate hike by the Bank of Japan in December tempered the Yen's losses. Traders appeared cautious, awaiting key US macroeconomic releases, including the Nonfarm Payrolls report and a speech by Federal Reserve Chair Jerome Powell, to gauge the Fed's monetary policy direction.

Other economic developments included anticipation around the US JOLTS Job Openings report for October, due later on Tuesday, as well as comments from Federal Reserve officials Adriana Kugler and Austan Goolsbee. These events are expected to provide further insights into labor market trends and the Fed's policy outlook.

As markets enter the final stretch of the year, investors remain attuned to the interplay of geopolitical tensions, fiscal and monetary policy shifts, and macroeconomic data. The evolving landscape presents both opportunities and challenges, making careful analysis of these dynamics essential for navigating the complexities of global markets.