US stocks continued their recent upswing, with major indexes climbing for the fourth consecutive day as investors favoured AI-related names during a shortened trading week. The S&P 500 increased by 0.3%, staying close to a record high, while the Nasdaq Composite rose by approximately 0.4%, driven by gains in large-cap technology and AI stocks. The Dow Jones Industrial Average added about 80 points. Small-cap stocks lagged, with the Russell 2000 declining around 0.6%.<\/p>\n
The market absorbed a delayed economic report showing US GDP growth at a 4.3% annualised rate in the third quarter, surpassing expectations. Consumer spending drove this growth, raising questions about how soon the Federal Reserve might lower interest rates. Futures markets still anticipate two Fed rate cuts by next year\u2019s end. Some focus remains on potential shifts in Fed leadership, which could lean more dovish.<\/p>\n
Consumer confidence, reported by the Conference Board, decreased in December, reflecting concerns about future economic conditions despite strong growth. Citadel plans to return $5 billion in profits to investors, highlighting strength in large alternative asset managers.<\/p>\n
In commodities, gold and silver reached new highs, with gold surpassing $4,530 an ounce and silver over $70 an ounce, influenced by expectations of rate cuts and inflation fears. Markets anticipate a holiday period with equities near record levels, buoyed by technology optimism and potential monetary policy easing.<\/p>\n
We are seeing a familiar split in the market with large-cap tech leading while small caps fall behind. This suggests setting up trades that benefit from this gap, like buying call options on the Nasdaq 100 while simultaneously buying puts on the Russell 2000. This strategy hedges against a broad market downturn while capitalizing on the ongoing strength in AI, a pattern we saw repeatedly through 2023 and 2024.<\/p>\n
The market is ignoring strong economic growth and focusing only on future rate cuts, creating a disconnect we can trade. With November 2025’s CPI data coming in a bit sticky at 2.9%, any hawkish comments from the Fed in January could surprise traders. We believe buying volatility through VIX call options or S&P 500 straddles is a prudent way to prepare for a potential reality check.<\/p>\n
The drop in consumer confidence, despite strong GDP, is a warning sign for retail and discretionary spending. This follows a three-month decline in the University of Michigan’s sentiment index, suggesting household budgets are strained. We think it is wise to purchase protective put options on consumer discretionary sector ETFs ahead of the upcoming earnings season.<\/p>\n
Gold and silver reaching record highs is a major signal, fueled by rate cut hopes and recent reports of continued central bank buying throughout the fall of 2025. Similar to the breakout we witnessed back in 2024, this momentum could continue, making bullish call spreads on gold miners or the metal’s ETFs attractive. However, given how far prices have run, we should keep position sizes small to manage the risk of a sharp reversal.<\/p>\n
We must remember that we are entering a period of thin holiday trading volume. This low liquidity can lead to amplified price swings on minor news, a pattern we often see in the final week of the year. It would be wise to tighten stop-losses and consider using defined-risk option strategies rather than holding large, speculative positions into the new year.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" US stocks rose for a fourth day, driven by AI optimism, strong GDP data, and rate cut hopes.<\/p>\n","protected":false},"author":62,"featured_media":16984,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-43511","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43511","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=43511"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/43511\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/16984"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=43511"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=43511"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=43511"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}