Nvidia CEO Jensen Huang had come out and told the Financial Times that "China is going to win the AI race," citing the country's lower energy costs and looser regulations before later softening his tone to assert that America must "race ahead" to maintain its lead. The comments come as Huang's company faces a complete market freeze in China, with Beijing conducting national security reviews that have reduced Nvidia's market share there to zero, using access as leverage to gain advantage in trade negotiations. Meanwhile, OpenAI's spending spree through its Stargate project had pushed other related stocks high, with plans to invest over $400 billion across the next three years toward nearly 7 gigawatts of AI data centre capacity, putting the company ahead of schedule to meet its ambitious $500 billion, 10-gigawatt commitment. The flagship Stargate campus in Abilene, Texas, is already operational and running on Oracle Cloud Infrastructure, with additional major sites selected in Michigan's Saline Township, a multi-billion dollar, 1-gigawatt facility expected to begin construction in early 2026, along with locations in Ohio, New Mexico, Wisconsin, and multiple Texas counties.
EQUITY
Stocks are bouncing back after a bloody Tuesday, spared by corporate earnings and improving payroll data and services sector activity. Investor sentiment was again lifted by U.S. Supreme Court scepticism over the legality of Trump-era tariffs. Earnings performance pushed McDonald’s, Amgen, and Advanced Micro Devices to add to overall gains, with the semiconductor index contributing 3% while consumer staples lagged.
GOLD
Gold prices rangebound after regaining losses on the fourth, as robust private payrolls data reduced the already low bets for another rate cut. Compounded with an eight-month high in services sector activity, the December rate cut probability is now at 62%, down from over 90% days ago, with markets now viewing the recent cut as the last for 2025.
OIL
Crude benchmark prices hover at two-week lows in its third losing streak. US crude inventories reported a 5.2 million barrel surplus, the largest weekly buildup since July, due to rising global output from OPEC+ and non-OPEC producers. Demand remains limited by below-forecast global growth (850,000 bpd year-to-date) and weak US consumption due to shutdown-related travel and shipping limitations. Capital Economics sees prices falling to $60/bbl by end-2025 as a surplus of up to 2 million bpd materialises next year.
CURRENCY
The greenback has started pulling back from 5 sessions of strong rally now that the hawkish Fed rhetoric has run out of steam, benefitting other currencies like the pound, which is bouncing off after reaching a 7-month low on hint of a tax increase ahead of meet. The yen hold strong for the past 5 days, gaining on strong wage data and potential rate hike.
