Tech Drags US Futures as Global Stocks Eye Records: Markets Wrap
(Bloomberg) — US stock futures were held back once again by a retreat in technology shares on a day when global gauges had record highs in their sights.
The Nasdaq 100 was set to drop 0.5% at the open. Broadcom Inc. fell more than 6% in premarket trading after its sales outlook fell short of lofty expectations. S&P 500 futures were slightly weaker after the index notched a record close in the previous session. By contrast, gauges for US blue-chip and small-cap stocks were poised to extend their push into fresh highs.
The diverging fortunes for US equities highlight the broadening of a rally that has put the S&P 500 on track for a third successive year of gains. For many investors, this week’s affirmation that the Federal Reserve’s easing cycle is still intact is clearing the way for a year-end rally.
In other parts of the world, Europe’s Stoxx 600 rose as much as 0.5% to a fresh peak, while a measure for Asia advanced to less than 2% from its all-time high.
Traders “are searching for alternative real assets, especially given the Federal Reserve rate cut and the possibility of more to come,” wrote Richard Hunter, head of markets at Interactive Investor. “The rotation also provides something of a hedge for investors, where concentration risk among the ‘Magnificent Seven’ in particular was becoming more of an issue.”
Diversification across geographies and themes is becoming a key consideration. After technology heavyweights drove equity gains for much of the year, concerns about stretched valuations and vast capital outlays have prompted investors to look for opportunities elsewhere.
“Given the set-up in markets, diversification is now the price worth paying to keep you fully invested in equities,” wrote Goldman Sachs’s Mark Wilson. He adds that there are compelling investment stories including Korea, Japan, China or the broader emerging markets.
Meanwhile, strategists at Goldman Sachs Group Inc. expect stocks to notch fresh records next year, citing resilient economic growth and broader adoption of artificial intelligence to support corporate earnings.
The team led by Ben Snider reaffirmed its target for the S&P 500 to reach around 7,600 points in 2026, implying gains of about 10% from current levels. Other forecasters and asset managers share the upbeat view, with strategists at firms including Morgan Stanley, Deutsche Bank AG and RBC Capital Markets LLC also calling for US stocks to rise more than 10%.
Market forecasters are broadly positive on Europe as well, with not a single one of the 17 strategists surveyed by Bloomberg expecting a major decline. Four strategists, including those at UBS Group AG and Deutsche Bank AG, project gains of nearly 13% from Wednesday’s close.
Some are eyeing gains on an even shorter horizon, betting on further advances before 2025 ends as investors rotate into stocks that have so far remained in tech’s shadow.
“Everyone is convincing themselves that there will be a Christmas rally, so it looks like there will be one, and to be honest, there’s no negative catalyst visible until the end of the year,” said Karen Georges, a fund manager at Ecofi Investissements in Paris. “Investors are keen to buy this year’s laggards, it’s a good time to diversify your portfolio at the moment.”
Bloomberg’s index of the dollar traded near a two-month low on Friday and was on track for a third weekly loss. Treasury 10-year yields advanced two basis points to 4.18%. In commodities, gold rose for a fourth day while silver extended its all-time high.
What Bloomberg Strategists Say…
“At the index level, US equities were boosted by a December Fed meeting that was interpreted as dovish. But beneath the surface, sector performance suggests growing concern about how much further the Fed will cut interest rates.
“Segments of the markets that typically benefit from easing cycles, such as telecoms, real estate, and utilities, have all lagged in the past week. That underperformance is likely to continue.”
— Skylar Montgomery Koning, macro strategist. For the full analysis, click here.
Corporate News:
A group of influential Swiss lawmakers proposed watering down the capital demands that the country wants to impose on UBS Group AG, sending shares to a 17-year high. SoftBank Group Corp. is studying potential acquisitions including data center operator Switch Inc., people with knowledge of the matter said, underscoring billionaire founder Masayoshi Son’s growing ambitions to ride an AI-fueled boom in digital infrastructure. Broadcom Inc., a chip company vying with Nvidia Corp. for AI computing revenue, slumped after its sales outlook for the red-hot market failed to meet investors’ lofty expectations. Lululemon Athletica Inc. shares rallied after the pricey yoga-wear maker boosted its full-year outlook and announced that its chief executive officer would step down after a period of sluggish growth. Some of the main moves in markets:
Stocks
S&P 500 futures were little changed as of 8:29 a.m. New York time Nasdaq 100 futures fell 0.5% Futures on the Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 rose 0.1% The MSCI World Index was little changed Currencies
The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1731 The British pound was little changed at $1.3378 The Japanese yen fell 0.2% to 155.95 per dollar Cryptocurrencies
Bitcoin fell 0.6% to $92,295.56 Ether fell 0.2% to $3,242.94 Bonds
The yield on 10-year Treasuries advanced two basis points to 4.18% Germany’s 10-year yield advanced two basis points to 2.86% Britain’s 10-year yield advanced two basis points to 4.50% Commodities
West Texas Intermediate crude was little changed Spot gold rose 1.3% to $4,336.33 an ounce This story was produced with the assistance of Bloomberg Automation.
–With assistance from Levin Stamm, Julien Ponthus, Jan-Patrick Barnert, Michael Msika and Sagarika Jaisinghani.
©2025 Bloomberg L.P.
