North American Morning Briefing: Stock Futures to End 2025 Near Record Highs

Adam

Summary:

U.S. stock futures edged lower but hovered near record highs to close 2025, as investors weighed cautious Fed signals, falling metals and oil prices, and thin holiday trading conditions.

OPENING CALL

Stock futures were down on Wednesday but were on track to end the year at near record highs.

The Dow industrials is up 14% for the year to date and the Nasdaq composite is 21% higher.

"The stock market is essentially treading water right now, and we're probably going to have more of this low-volume trading action on Friday, the day after New Year's Day," said Navellier & Associates.

Investors were weighing the Federal Reserve's last meeting minutes released on Tuesday , which showed some officials were reluctant to support further interest rate cuts in the near future.

The Fed cut rates by 25 basis points this month but some officials indicated that the decision was finely balanced or that they could have supported keeping rates unchanged. Most members thought rates could fall eventually if inflation declines.

Citi analysts expect rates will fall as focus increasingly switches to employment risks and away from inflation risks .

Weekly data on initial unemployment-insurance claims are due at 8:30 a.m. ET. Jobless claims are expected to tick higher to 220,000 from 214,000, in a WSJ consensus.

Metals prices were falling early Wednesday, with silver futures down nearly 9%. Despite this week's volatility, gold remains on track to gain 65% over the past 12 months while silver notched its largest single-day gain on record Tuesday.

Meanwhile, Hong Kong stocks ended 2025 with a second consecutive annual gain , posting their best performance since 2017 in percentage terms.

U.S. stock and bond markets will wrap up the year today, then close on Thursday in observance of New Year's Day.

Watch For:

Weekly Jobless Claims; EIA Weekly Petroleum Status Report

Today's Top Headlines/Must Reads:

How Meta's Newest Acquisition Target Got Around Worries Over Its Ties to China

Bankers Are Gearing Up for Another Onslaught of Monster Deals in 2026

OpenAI Is Paying Employees More Than Any Major Tech Startup in History

MARKET WRAPS

Forex:

The dollar rose to its highest in over a week against a basket of currencies. The greenback was set to record its worst annual performance since 2017 and faces further weakness next year, MUFG Bank said.

The euro fell against the dollar on the last day of 2025 but remains on track for a strong annual performance.

Sterling fell to a nine-day low versus a stronger dollar but trades steady against the euro in the absence of U.K.-specific catalysts.

Bonds:

Treasurys edged lower, even after Fed minutes showed some policymakers were cautious about further near-term interest-rate cuts.

Energy:

Oil nudged down as traders close out a year in which oversupply fears pushed the commodity lower, despite ongoing geopolitical tensions.

Metals:

Gold fell as the precious metal limped over the line of a record-breaking year.

The precious metal has gained around 65% this year. The rally "not only reflected deep macroeconomic concerns but also pushed gold into a high valuation zone , making the market more sensitive to short-term corrective factors," said XS.

Silver

Silver futures fell after exchange operator CME Group increased margin requirements for the second time in a week.

Iron

Iron ore fell. Seasonal shipments at the year-end have resulted in accumulating port inventories, putting downside pressure on prices , Nanhua Futures said.

TODAY'S TOP HEADLINES

How Meta's Newest Acquisition Target Got Around Worries Over Its Ties to China

Workers at Butterfly Effect, an artificial-intelligence startup with Chinese roots, gathered in March to count down to the launch of a demo of a new AI-powered tool called Manus.

Released in the shadow of DeepSeek, a China-built AI model that rocked the U.S. market in January owing to its advanced capabilities and low cost, Manus became an overnight hit. The product, which used models from Anthropic and others to produce detailed research reports and perform a host of other tasks, showcased the talents of China's entrepreneurs and startups in a burgeoning global battle for AI supremacy.

OpenAI Is Paying Employees More Than Any Major Tech Startup in History

OpenAI is paying employees more than any tech startup in recent history, according to financial data it has shown investors.

The company's stock-based compensation is about $1.5 million per employee, on average, across its workforce of roughly 4,000.

Bankers Are Gearing Up for Another Onslaught of Monster Deals in 2026

Megadeals returned in full force in 2025. Wall Street is already bracing for another wave in 2026.

There were a record 68 transactions valued at $10 billion or more announced globally this year, according to data from LSEG going back to 1980. That drove the average annual deal size to a new high of nearly $227 million.

Hong Kong IPO Momentum Builds as Six Chinese Firms Seek to Raise Over $2.0 Billion

The frenzy for Hong Kong listings is gathering pace, with six more Chinese firms targeting to raise over US$2 billion in January, raising hopes of another blockbuster year for the market.

The companies, spanning from artificial intelligence to chip designers and biopharmaceuticals, aim to raise around 16.6 billion Hong Kong dollars, equivalent to US$2.13 billion, according to filings to Hong Kong's exchange operator on Wednesday.

Hong Kong Stocks Log Best Year Since 2017 as AI Boom Fuels Tech Rally

Hong Kong stocks ended 2025 with a second consecutive annual gain, posting their best performance since 2017 in percentage terms, thanks to a tech rally fueled by artificial intelligence.

The city's benchmark Hang Seng Index finished the year up 28%, making it one of Asia's best performing markets.

China's Factory Activity Gauges Signal Return to Growth

China's factory activity signaled a return to growth in December, according to both official and private surveys, an improvement likely to help Beijing achieve its growth target for the year.

The official manufacturing purchasing managers index rose to 50.1 for December from 49.2 in November. The reading topped the 49.4 forecast from economists surveyed by The Wall Street Journal and ended an eight-month run below the 50 mark that separates expansion and contraction.

China's 'Invisible' Stimulus Is Here. Why It's Easy to Miss.

For much of the past year, global investors have been waiting for China to do something dramatic: a massive fiscal package, a sweeping consumer giveaway, a decisive interest-rate cut signaling Beijing is serious about reviving growth.

None has arrived. And that absence has helped cement a prevailing narrative: China isn't stimulating, and without a big push, its economy will continue to drift.

Oil Tanker Pursued by the U.S. Appears to Claim Russian Protection

The pursuit of the Bella 1, an aging oil tanker that has been evading the U.S. Coast Guard for nearly two weeks, was complicated after a Russian flag was sloppily painted on the side of the vessel in an apparent attempt to claim protection from Moscow, according to senior U.S. officials.

Coast Guard vessels have been tracking the very large crude carrier through the Atlantic Ocean, staying about a half-mile behind, according to the officials. They said that they are in a position to seize the tanker should the White House give the green light to proceed, more than 10 days into a pursuit that began around Venezuelan waters.

Russia Doubles Down on Allegations Ukraine Targeted Putin Residence

It is known as Dolgiye Borody, or Long Beards, and it is one of Russian President Vladimir Putin's favored official residences, built on a lake shore in the country's northwest. In the past, it was used by Soviet leaders Joseph Stalin and Nikita Khrushchev.

The Kremlin has alleged that Ukrainian drones targeted the well-protected site in Novgorod and is using its claim to justify a hardening of its stance in peace negotiations. The Kremlin on Tuesday declined to provide any evidence to back up its assertions.

Five Challenges Mamdani Faces on Day 1 as NYC Mayor

After Zohran Mamdani takes over running the country's largest city on Thursday, the 34-year-old Democratic socialist and relative political newbie will face a series of crucial early tests.

As New York City mayor, Mamdani plans to move forward with delivering on an ambitious affordability agenda while overseeing a vast municipal bureaucracy. Wall Street and real estate bigwigs have serious concerns that his administration will enact policies that upend the city's economy and reverse a recent crime drop. Meanwhile, his backers on the left expect him to deliver on his promise to freeze rents, create a free bus service and expand free child care.

Trump Administration Freezes Child Care Funding to Minnesota Amid Fraud Probes

The Trump administration said Tuesday it is freezing federal child-care funding to Minnesota following allegations of yearslong fraud schemes involving the state's social-services system.

"We have turned off the money spigot," Jim O'Neill, the deputy secretary at the Department of Health and Human Services, posted in a statement on X with an accompanying video.

Source: morningstar

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