US equities ended the holiday-shortened week higher, lifted by dovish Federal Reserve commentary and softer data that reinforced expectations for a December rate cut. Small caps outperformed, with the Russell 2000 up 5.5%, while the Nasdaq rebounded as AI valuation concerns eased. Retail sales signaled cooling momentum, rising 0.2% m/m in September, with core and control group components weak. PPI remained contained, with headline up 0.3% m/m and core up 0.1%. Initial jobless claims fell to a seven-month low, though continuing claims edged up. Consumer confidence dropped sharply to 88.7 amid concerns over prices, trade, and politics. The Beige Book pointed to steady overall activity, slight labor market softening, and moderate price pressures, with tariff-related input cost increases noted in manufacturing and retail. Consumer spending weakened but remained resilient at the high end. Treasury yields moved lower as markets priced in a near-term rate cut.
European equities advanced, with the STOXX Europe 600 up 2.4%. November inflation readings in France (0.8%), Spain (3.1%), and Italy (1.1%) suggested continued moderation, supporting expectations that eurozone inflation is stabilizing near the ECB’s 2% target. Analysts anticipate the December 2 Eurozone release to show roughly 2.2%.
