U.S. stocks rise for five consecutive days to new highs, while the U.S. bond yield and dollar trend diverge, putting pressure on the crypto market for adjustments.

Market activity before Christmas remains subdued, but U.S. stocks are defying the trend and gaining strength. On Wednesday, the three major U.S. stock indices all rose, with the S&P 500 and Dow Jones both hitting new all-time closing records. The Dow increased by 0.6%, the S&P 500 rose by 0.32%, and the Nasdaq edged up by 0.22%. This five-day rally reflects investors’ reassessment of the resilience of the U.S. economy.

Economic Data Surprises to the Upside, Corporate Earnings Outlook Supports the Market

Last week, initial jobless claims in the U.S. fell to 214,000, below the market expectation of 223,500. Despite this relatively optimistic data, the labor market remains in a stalemate of “neither hiring nor firing.” As of the week ending December 13, the continued claims increased by 38,000 to 1.923 million.

More importantly, the U.S. Q3 real GDP surged to 4.3%, the fastest growth in two years, providing a strong earnings foundation for companies. Morgan Stanley analysts noted that companies have begun to pass on tariff costs through price hikes, successfully shifting some of the pressure in Q3, with plans to further raise prices by 2026.

Divergent Trends in Bond and Forex Markets

The 10-year U.S. Treasury yield declined to 4.13%, down 3 basis points from the previous trading day. The 20-year U.S. Treasury yield also fell, reflecting market adjustments to the Federal Reserve’s rate cut expectations. Nevertheless, the U.S. dollar index rose slightly by 0.07% to 97.95, indicating resilience within the range. USD/JPY and EUR/USD fell by 0.18% and 0.14%, respectively.

Regarding Fed policy expectations, CME data shows the market still anticipates two rate cuts next year, each of 25 basis points. BlackRock’s strategy team pointed out that the Fed has already cut rates by a total of 175 basis points in this cycle, approaching a neutral level. There is limited room for further cuts in 2026 unless the labor market deteriorates sharply.

Tech Stocks Lead Gains, Memory Chips Perform Remarkably

The U.S. tech sector remains strong, with Micron Technology up 3.77%, gaining over 241% year-to-date; SanDisk rose 2.12%, Western Digital increased by 0.73%, with annual gains of 613% and 300%, respectively. The robust performance of memory and storage chips reflects ongoing demand from AI and data centers.

Gold slightly declined by 0.13% to $4,479.4 per ounce, WTI crude oil fell by 0.12% to $58.4 per barrel, and overall commodity markets remain under pressure.

Cryptocurrency Market Pullback, Bitcoin Faces Correction Pressure

The crypto market shows a mixed trend. Bitcoin is currently at $92.11 (based on current data, down 2.29% over 24 hours), while Ethereum is at $3.22 (up 0.08% over 24 hours). Compared to the strong performance before Christmas, cryptocurrencies have recently faced correction pressures, and investor risk appetite has declined.

European Stocks Generally Decline, Regulatory Policies Tighten

European markets are weaker, with the UK FTSE 100 down 0.19%, France’s CAC 40 nearly flat at -0.01%, and Germany and Italy markets closed for holidays. Notably, the EU’s new Digital Asset Tax Transparency Regulation (DAC8), set to take effect on January 1, 2026, will require crypto service providers to collect and report user transaction details, with severe penalties including asset freezes or confiscation for non-compliance.

Tech Giants in Action, Industry Landscape Shifts

OpenAI employees are exploring plans to embed advertising within ChatGPT, aiming to prioritize promotional content and pioneer new forms of digital advertising. Meanwhile, NVIDIA has recently paused testing of Intel’s 18A process. Despite a $5 billion collaboration announced in 2025, actual progress appears to face technical challenges.

Overall, U.S. stocks remain energetic, supported by solid economic fundamentals. However, limited room for Fed rate cuts, persistent corporate inflation pressures, and increased crypto volatility suggest investors should closely monitor upcoming policy developments and economic data releases.