Will there be a new AI leader?

What to look out for today

Companies reporting on Wednesday, 26^th November: Deere & Co.

Key data to move markets today

EU: EU Financial Stability Report and speeches by ECB President Christine Lagarde and Chief Economist Philip Lane
UK: Budget Report
USA: Personal Consumption Expenditures (PCE) and Core PCE Indices, Durable Goods, GDP, Initial and Continuing Jobless Claims, Nondefense Capital Goods Orders ex Aircraft, Personal Income and Personal Spending, Chicago PMI, New Home Sales, and Fed’s Beige Book

US Stock Indices

Dow Jones Industrial Average +1.43%
Nasdaq 100 +0.58%
S&P 500 +0.91%, with 8 of the 11 sectors of the S&P 500 up

Eight of the S&P 500’s eleven sectors posted gains, with Healthcare stocks leading the advance by rising +2.16%. The Dow Jones Industrial Average increased by 664 points, or +1.43%, marking its strongest performance since August. The S&P 500 gained +0.91%, while the Nasdaq Composite rose +0.67%.

In corporate news, Kohl’s shares surged following the company’s unexpected quarterly profit and an improved full-year outlook. Although Kohl’s still anticipates a sales decline of up to 4% this year, this projection is an improvement over its previous forecast of a decrease as much as 6%. This positive revision comes as Michael Bender, who recently served as interim leader, officially became CEO on Monday.

Novo Nordisk announced that a drug candidate demonstrated efficacy in promoting weight loss and reducing diabetes indicators in both injectable and oral forms.

S&P 500 Best performing sector

Healthcare +2.16 %, with Merck +5.24%, Revvity +4.96%, and Charles River Laboratories International +4.46%

S&P 500 Worst performing sector

Energy -0.68%, with Texas Pacific Land -1.40%, Coterra Energy -1.37%, and EQT -1.36%

Mega Caps

Alphabet +1.62%, Amazon +1.50%, Apple +0.38%, Meta Platforms +3.78%, Microsoft +0.63%, Nvidia -2.59%, and Tesla +0.39%

Divergence in the AI arena. Alphabet shares rallied on Tuesday, +1.62% and moved ever closer to a $4 trillion market valuation. This rally has been driven by strong investor interest in the Google parent’s AI tools, cloud computing initiatives, and semiconductor operations. After reports surfaced that Meta was considering Google’s chips for its data centres, Alphabet shares surged as much as 3.2% in early trading. Last year, Alphabet ramped up semiconductor production, aiming to reduce dependence on external suppliers.

However, shares of Nvidia declined -2.59%, pushing the world’s largest company by market capitalisation further below the $5 trillion threshold it surpassed just weeks ago.

The divergence in performance on Tuesday was influenced by reports that Meta Platforms is in discussions to invest billions of dollars in Google’s AI chips, one of the limited alternatives to Nvidia’s offerings. This was the latest in a series of events that have pushed Alphabet +15.03% this month, while Nvidia’s shares are -12.18%.

Tuesday’s news struck a chord for investors already wary of excessive CapEx, circular financing arrangements, and escalating competition within the AI space. Alphabet is benefiting from a potential agreement with Meta, a favourable court ruling that alleviated concerns of a government-mandated breakup, a significant investment from Berkshire Hathaway, and the successful launch of its Gemini 3 AI model.

While Nvidia’s shares are +32.41% YTD, they have borne the brunt of concerns that robust investments in AI infrastructure may not yield profits in the future.

In response to critical comments from investors like Michael Burry, Nvidia issued a seven-page report to stock analysts over the weekend. Some critiques had drawn parallels between Nvidia’s business practices and historic corporate scandals. Nvidia responded, stating, ‘Nvidia does not resemble historical accounting frauds because Nvidia’s underlying business is economically sound, our reporting is complete and transparent, and we care about our reputation for integrity.’ However, the private nature of the memo and its defensive tone appears to have heightened investor unease.

Information Technology

Best performer: Keysight Technologies +10.01%
Worst performer: Advanced Micro Devices -4.15%

Materials and Mining

Best performer: Albemarle +8.09%
Worst performer: Newmont -0.30%

European Stock Indices

CAC 40 +0.83%
DAX +0.97%
FTSE 100 +0.78%

Corporate Earnings Reports

Posted on Tuesday, 25^th November

HP quarterly revenue +4.2% to $14.639 bn vs $14.498 bn estimate

EPS at $0.92 vs $0.93 estimate

Enrique Lores, President and CEO, said, “HP’s strategy to lead the Future of Work continues to deliver strong performance, marked by our sixth consecutive quarter of revenue growth. Our FY25 results reinforce the power of our portfolio and the strength of our team in a dynamic environment. As we accelerate innovation across AI-powered devices to drive productivity, security, and flexibility for our customers, our focus for FY26 is on disciplined execution. We are committed to driving measurable results - ensuring that our plans translate into long-term value for our shareholders.” — see report.

Zscaler quarterly revenue +25.5% to $788 million vs $773 million estimate

EPS at $1.52 vs $1.49 estimate

Jay Chaudhry, Chairman and CEO, said, “Our outstanding Q1 results demonstrate the strong demand we are experiencing for our Zero Trust and AI Security platform. With over $3.2B in Annual Recurring Revenue, growing over 25% year-over-year, and Rule-of-78 performance, I'm very pleased to share that an increasing number of customers are relying on our platform for better security, lower operational costs and reduced IT complexity. Zero Trust security is the linchpin for AI-Security, and Zscaler pioneered Zero Trust security with our cloud-native switchboard architecture. By integrating the recently acquired SPLX technology with our comprehensive AI Security offerings, we are expanding our best-in-class AI Security solutions to solve emerging security challenges.” — see report.

Commodities

Gold spot -0.11% to $4,129.82 an ounce
Silver spot +0.21% to $51.45 an ounce
West Texas Intermediate -1.17% to $58.08 a barrel
Brent crude -1.17% to $62.61 a barrel

Gold prices remained largely unchanged on Tuesday, as weaker-than-anticipated US retail sales data bolstered market expectations for a Fed interest rate cut in December.

Spot gold was -0.11% to $4,129.82 per ounce, after having reached its highest level since 14^th November earlier in the session and advancing +1.70% on Monday. 

Oil prices declined following indications from Ukraine that a vigorous diplomatic initiative by the US administration to resolve Russia’s ongoing conflict may be making progress. Brent crude futures were down $0.74, or -1.17%, to $62.61 per barrel. US WTI crude futures dropped $0.69, or -1.17%, to $58.08 per barrel.

Sanctions imposed on major Russian oil companies, such as Rosneft and Lukoil, alongside restrictions on the sale of oil products refined from Russian crude to Europe, have prompted certain Indian refiners to scale back their purchases of Russian oil. This has resulted in reduced Russian oil exports and an accumulation of Russian crude stored in tankers at sea. These could flood the market should a peace agreement lead to the lifting of sanctions against Rosneft and Lukoil.

Russian Deputy Prime Minister Alexander Novak said Tuesday that Russia is exploring opportunities to expand its energy exports to China.

Note: As of 5 pm EST 25 November 2025

Currencies

EUR +0.43% to $1.1569
GBP +0.50% to $1.3166
Bitcoin -2.37% to $86,696.88
Ethereum -0.97% to $2,932.22

The US dollar declined on Tuesday, following a series of mixed economic reports that strengthened market expectations for a Fed interest rate cut next month.

The euro was +0.43% against the dollar, reaching $1.1569, while the British pound rose +0.50% to $1.3166. The dollar index fell -0.35%, settling at 99.82.

The US dollar was -0.55% against the Japanese yen to ¥156.04. Investors are still looking for indications of official intervention.

With US Thanksgiving tomorrow thinner market liquidity may provide advantageous conditions for potential BoJ intervention in the dollar-yen exchange rate.

Fixed Income

US 10-year Treasury -3.2 basis points to 4.000%
German 10-year bund -1.6 basis points to 2.679%
UK 10-year gilt -4.5 basis points to 4.499%

US Treasury yields declined for the fourth consecutive session on Tuesday. The yield on the 10-year Treasury note was -3.2 bps to 4.000%, marking its lowest level in nearly a month. During the session, yields briefly fell below 4% for the first time since late October.

Two-year Treasury yields were -3.8 bps to 3.465%, their lowest point since 24^th October. The two-year and 10-year yield curve steepened to 53.5 bps from 52.9 bps.

On the long end of the curve, the 30-year yield declined -1.5 bps to 4.651%.

The Treasury's auction of $70 billion in five-year notes on Tuesday attracted muted demand. The securities were issued with a high yield of 3.562%, a half basis point above prevailing market rates at the bidding deadline, suggesting that investors required a modest premium to take on the additional supply.

According to CME Group's FedWatch Tool, Fed funds futures traders are pricing in a 84.3% probability of a 25 bps rate cut at December FOMC meeting, higher than the prior week’s 50.1%. Traders are currently expecting 21.1 bps of cuts by year-end, higher than the 12.5 bps anticipated last week.

Eurozone bond yields declined on Tuesday. Germany’s 10-year Bund yield fell -1.6 bps to 2.679%. The 2-year Schatz yield was -0.2 bps, settling at 2.019%. At the long end, the 30-year yield dropped -2.0 bps to 3.303%.

European interest rates have remained relatively stable in recent weeks, as market participants anticipate the ECB will keep its policy unchanged. The recent decline in US yields contributed to a narrowing of the spread between German and US 10-year yields, which reached 132.8 bps on Monday — the tightest closing level in two months — before expanding slightly to 135.3 bps on Tuesday.

Divergence in central bank outlooks and delays in economic data releases have made it challenging for investors to take high-conviction trades. Although ECB President Christine Lagarde has reiterated that the current policy rate is in a good place, she cautioned last week about vulnerabilities in the eurozone’s economic growth.

French and Italian 10-year government bond yields moved broadly in line with Germany’s. On Tuesday, France’s 10-year yield declined-4.3 bps to 3.413%, while Italy’s 10-year yield decreased -4.3 bps to 3.407%, narrowing the spread over German 10-year yields to 72.8 bps.

Note: As of 5 pm EST 25 November 2025

Global Macro Updates

Retail sales disappoint as confidence and inflation concerns persist. September’s retail sales, which were delayed due to the government shutdown, rose by 0.2% m/o/m — marking the smallest gain since June and falling short of the anticipated 0.4% increase and August’s 0.6% rise. Retail sales excluding autos increased by 0.3% m/o/m, aligning with consensus expectations. This also represents a deceleration from the previous month’s 0.6% growth. The retail control group, which contributes directly to GDP calculations, declined by 0.1%, missing forecasts for a 0.2% increase and dropping from August’s 0.6% gain.

Strength in sales was observed across several categories: miscellaneous stores (+2.9%), gas stations (+2.0%), health and personal care stores (+1.1%), bars and restaurants (+0.7%), furniture stores (+0.6%), grocery stores (+0.3%), building materials and garden supply stores (+0.2%), and general merchandise stores (+0.1%). Conversely, declines were registered in sporting goods and hobby stores (-2.5%), online retailers (-0.7%), clothing stores (-0.7%), electronics and appliance stores (-0.5%), and motor vehicle and parts dealers (-0.3%).

The September Producer Price Index (PPI), also delayed, increased by 0.3% m/o/m, matching consensus expectations, but slowing from August’s 0.8% advance. The core PPI, which excludes food and energy, rose 0.1% m/o/m, falling short of the projected 0.3% and August’s 0.8% increase. On an annual basis, headline PPI stood at 2.7%, consistent with August and slightly above the consensus of 2.6%. Annualised core PPI registered at 2.6%, below the expected 2.7% and cooler than August’s 2.9%. The majority of the price increase was attributed to the goods index, which rose 0.9% m/o/m, with two-thirds of that advance linked to higher gasoline prices. The index for final demand services remained unchanged in September after declining 0.3% in August.

Additional economic indicators showed mixed results. November consumer confidence disappointed, coming in at 88.7, its lowest level since April and well below the consensus of 93.3 and the previous reading of 95.5. The Present Situation Index fell by 4.3 points to 126.9, while the Expectations Index dropped by 8.6 points to 63.2. Labour market sentiment weakened slightly: 27.6% of consumers reported that jobs were ‘plentiful,’ down from 28.6% in October, and 17.9% indicated that jobs were ‘hard to get,’ down from 18.3%. The proportion of respondents expecting more jobs to become available declined to 14.6% from 15.8%, and those anticipating fewer jobs decreased to 27.5% from 28.8%. Twelve-month inflation expectations remained elevated, with the median rate rising to 4.8%. Write-in survey responses pointed to concerns about prices, inflation, tariffs and trade, and the government shutdown, though labour market worries were less frequently mentioned.

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