Stocks Drop, Bitcoin Slides in Poor December Start: Markets Wrap

(Bloomberg) — Global stocks fell and cryptocurrencies slumped, signaling risk aversion ahead of a slew of US economic data this week even as bets for a December Federal Reserve interest-rate cut remain firm.

Futures contracts on the S&P 500 dropped as much as 0.8%, while those for the Nasdaq 100 declined 1.1%. European futures also pointed to a weak open for shares. Bitcoin tumbled 6% to slide below $86,000, bringing fresh momentum to a wide-ranging selloff that appeared to have settled. Most tokens followed a similar pattern, with Ether dropping more than 7%.

In Asia, the regional equities gauge was down 0.4%. Japanese stocks led losses and the yen strengthened as Bank of Japan Governor Kazuo Ueda sent the clearest hint yet that his board might raise rates soon, highlighting the possibility of a move at the central bank’s meeting this month. Ahead of his speech, the two-year bond yield rose to the highest since 2008.

The week ahead is set to offer a crucial snapshot of US economic momentum as policymakers weigh the trajectory of rates heading into 2026. With inflation and consumer demand under scrutiny, data is likely to shape expectations for whether the Fed continues its easing cycle. Traders are also bracing for a potential shift in central bank leadership with President Donald Trump saying on Sunday that he has decided on his pick for the next Fed chair.

“Investors are cautious to add risk ahead of upcoming US data and macro events,” said Jung In Yun, chief executive officer at Fibonacci Asset Management Global. This looks like a wait-and-watch approach, he said.

The MSCI All Country World Index fell 0.1% in November after rising for seven straight months. The rally halted as optimism around high-flying AI stocks faltered due to rising concerns about stretched valuations and excessive spending plans. The global equities gauge rose an average 0.5% in December over the last 10 years, historical data compiled by Bloomberg show.

The Bloomberg Dollar Spot Index edged slightly higher on Monday after four days of losses. Elsewhere, WTI crude oil jumped after OPEC+ confirmed it will stick with plans to pause production hikes during the first quarter. Silver and copper also climbed after hitting fresh records on Friday.

A rally in metal shares helped Chinese equities begin December on an optimistic note. That’s even as data published Sunday that showed factory activity improved but remained in contraction in November, extending its streak of declines to a record as the country’s economic slowdown deepens.

BOJ, Fed

The BOJ “will consider the pros and cons of raising the policy interest rate and make decisions as appropriate” by examining the economy, inflation and financial markets at home and abroad, Ueda said Monday in a speech to local business leaders in Nagoya, central Japan. Traders see about a 64% chance of a rate hike when the central bank concludes its next policy meeting on Dec. 19, according to the overnight swap index.

By calling attention to a specific policy meeting, Ueda is likely indicating the rising possibility of rate action at that time. In late December a year ago, the governor pledged to assess the state of the economy carefully at the next meeting, when the central bank wound up raising borrowing costs.

For the US, this week begins with fresh data on consumer spending, including Cyber Monday sales, and the release of more delayed economic indicators. Fed officials will review an outdated reading of their preferred inflation gauge ahead of the Dec. 9–10 policy meeting, where debate is expected to center on labor market conditions and the case for a third consecutive rate cut.

Markets are continuing to bet that the central bank will cut its benchmark this month. Swaps data shows traders have priced in almost a full quarter-point reduction since New York Fed President John Williams said he saw room to lower rates again in the near-term amid labor-market softness.

Meanwhile, White House economic adviser Kevin Hassett signaled markets were ready for the announcement of a new Fed chair. People familiar with the matter told Bloomberg News last week that Hassett was seen as the likely choice to succeed Powell. Speaking on CBS’ Face the Nation on Sunday, he declined to address whether he considers himself the front-runner to replace Fed Chair Jerome Powell.

The yield on 10-year Treasuries rose two basis points on Monday while the rate on two-year notes was little changed.

While the Fed enters its pre-meeting blackout period, Powell and Governor Michelle Bowman are scheduled to speak, though they are barred from commenting on the economic outlook or policy.

Other data in the coming week include ADP private employment figures for November, as well as Institute for Supply Management surveys of manufacturers and service providers. The Fed is also scheduled to release September industrial production figures.

“For now, the data supports the soft landing, and that contributed to the continued equity rally ahead of Thanksgiving,” wrote Tom Essaye of the Sevens Report. “However, there remain a lot of economic unknowns right now and there are simmering risks that the economy is not as strong as investors believe given the lack of government data in recent months.”

Corporate News

EQT AB and CVC Asia Pacific Ltd. scrapped talks with AUB Group Ltd. about a possible takeover offer that had valued the Australian insurance broker at around A$5.2 billion ($3.4 billion). AUB shares slumped. South Korean authorities are investigating a data leak at online retailer Coupang Inc. that exposed about 33.7 million accounts in what could be the widest hack for the country of 51.7 million people. BYD Co. will push a software update to almost 90,000 plug-in hybrid vehicles in China after the national regulator said manufacturing defects in battery packs pose safety risks. PaleBlueDot AI, a US-based artificial intelligence firm, is seeking a loan of about $300 million to help fund the purchase of advanced Nvidia Corp. chips for use in Japan by a Chinese client, according to people familiar with the matter, a rare case of financiers being tapped to support such deals. Hong Kong tycoon Henry Cheng is seeking buyers for properties in the family’s luxury Rosewood Hotel Group as the billionaire clan races to overcome liquidity challenges connected to its real estate unit New World Development Co. Stocks

S&P 500 futures fell 0.7% as of 6:53 a.m. London time Nasdaq 100 futures fell 0.9% Futures on the Dow Jones Industrial Average fell 0.5% The MSCI Asia Pacific Index fell 0.4% The MSCI Emerging Markets Index was little changed S&P 500 futures fell 0.7% Hong Kong’s Hang Seng rose 0.6% The Shanghai Composite rose 0.6% Euro Stoxx 50 futures fell 0.3% Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1593 The Japanese yen rose 0.4% to 155.63 per dollar The offshore yuan was little changed at 7.0704 per dollar The British pound fell 0.2% to $1.3213 Cryptocurrencies

Bitcoin fell 5.4% to $86,214.79 Ether fell 6.5% to $2,825.97 Bonds

The yield on 10-year Treasuries advanced two basis points to 4.04% Germany’s 10-year yield was little changed at 2.69% Britain’s 10-year yield declined one basis point to 4.44% Australia’s 10-year yield advanced four basis points to 4.55% Commodities

Spot gold was little changed West Texas Intermediate crude rose 1.9% to $59.66 a barrel Spot gold was little changed This story was produced with the assistance of Bloomberg Automation.

–With assistance from Youkyung Lee and David Finnerty.

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