Global financial markets fluctuate: US unemployment rate hits a four-year high, energy and tech stocks experience a rollercoaster ride

Employment Data Sparks Market Concerns, US Stocks Mixed

The latest data released by the U.S. Department of Labor shows non-farm employment increased by 64,000 in November, surpassing the expected 50,000. However, market focus shifted to the unemployment rate — which rose to 4.6% that month, hitting a new high since September 2021, above the forecasted 4.4%. This data reflects an intriguing phenomenon: companies are neither significantly laying off workers nor actively hiring, but are adopting a cautious approach to staffing. Industry analysts point out that part of this attitude stems from optimistic expectations about the prospects of artificial intelligence applications.

Affected by the employment data, the performance of the three major US stock indices diverged. The Dow Jones Industrial Average fell 0.62%, the S&P 500 declined 0.24% (marking three consecutive days of decline), while the Nasdaq Composite slightly rebounded by 0.23%. European stock markets all declined: the UK FTSE 100 dropped 0.68%, France CAC 40 fell 0.23%, and Germany DAX 30 decreased 0.63%. In Hong Kong, the Hang Seng Index night session futures closed at 25,219 points, down 32 points from the previous trading day.

Notably, Tesla’s stock price rose over 3%, reaching a new closing high and making it the seventh-largest company by market value in the US. On the same day, US tech stocks showed mixed performance: Nvidia rose 0.81%, Apple increased 0.18%, Microsoft gained 0.33%, Meta rose 1.49%, while a certain search engine company declined 0.54%.

Shift in Central Bank Policy Expectations, Bonds and Commodities Under Pressure

Federal funds futures data indicate a low likelihood of a rate cut in January, remaining at 24%. The yield on the 10-year US Treasury is about 4.14%, down 4 basis points from the previous day. The market is experiencing a rare scenario — the 10-year Treasury yield, oil prices, and the US dollar index are all weakening simultaneously, reflecting growing investor concerns about a US recession.

Commodity markets are under pressure. WTI crude oil fell 2.66% to $55.17 per barrel, hitting a recent low. Gold prices slightly declined by 0.06%, at $4,302 per ounce. The US dollar index decreased 0.04% to 98.21, USD/JPY fell 0.31%, and EUR/USD declined 0.05%.

In digital assets, Bitcoin rose 1.42% in 24 hours to $91,953, continuing its strong momentum. Ethereum increased 0.60% in 24 hours to $3,220. Compared to the overall weakness in traditional financial assets, the digital currency market demonstrates relative resilience.

Economic Growth Outlook in Doubt, Trade Tensions Rise

OECD Secretary-General stated that although surging AI investments support global growth, next year’s global economic growth is expected to slow to 2.9%, below this year’s forecast of 3.5%. The organization warns that trade headwinds could intensify further, as the full impact of tariffs has yet to be realized, and the economy faces multiple structural pressures.

The US government has taken a tough stance on the EU digital tax policy. The Office of the US Trade Representative announced that if the EU continues to use discriminatory measures to limit the competitiveness of US service providers, the US will deploy all available tools for retaliation, including imposing fees or restrictions on foreign services. The controversy centers on the EU’s regulation and taxation policies targeting certain large tech companies, as well as recent multi-hundred-million-dollar fines imposed on several firms.

Leadership Changes at the Federal Reserve Imminent, Trump to Deliver National Address

The US Treasury Secretary announced that this week, one or two interviews will be conducted for the next Federal Reserve Chair, with the President expected to announce the candidate in early January. Media reports suggest that the White House National Economic Council Director and a former Federal Reserve Board member are the top contenders, both highly regarded.

The President will deliver a prime-time speech on Wednesday evening, marking a critical moment as his first year back in the White House nears its end. Poll support has been under pressure, and economic policies face headwinds. The speech is expected to highlight achievements over the past year, clarify future priorities, and possibly preview policy directions for the new year, as Republican lawmakers prepare for the midterm elections in November next year.

Corporate Developments: Tech Giants Accelerate Expansion

OpenAI announced hiring a former UK Treasury official to lead its global data center expansion plans. The company has reached agreements with the UK and a Middle Eastern country, and is in talks with 50 countries regarding sovereign AI development. This move follows a recent appointment of a former UK Prime Minister as an advisor by a competitor in October.

Morgan Stanley released a new research report predicting that Tesla’s autonomous taxi fleet will expand significantly. The investment bank forecasts that, as technology validation progresses and new models are produced by 2026, Tesla’s autonomous fleet will grow from a few vehicles to approximately 1,000 by 2026. The safety driverless testing in Austin is seen as a key validation of this strategy and the most important recent catalyst.

Economic Data Overview

US October retail sales were flat month-over-month, versus an expected 0.1% growth. Excluding autos, retail sales increased 0.4%, slightly above the forecast of 0.3%. November’s average hourly earnings grew 3.5% year-over-year, slightly below the expected 3.6%. The US December services PMI preliminary reading was 52.9, below the market expectation of 54. The composite PMI preliminary was 53, below the expected 53.9. The manufacturing PMI preliminary was 51.8, slightly lower than the forecast of 52.1.

The Federal Reserve also revised October employment data, with non-farm payrolls significantly revised downward by 105,000, the largest decline since late 2020, mainly due to a reduction of 162,000 government jobs. Market analysts generally believe that the labor market will continue to face adjustment pressures in the coming months.