Markets in risk-on mode with year end rally on track.

🥁Mixed Performance in US Markets

While major indices surged on Monday, buoyed by optimism surrounding Trump’s deregulatory agenda and a more crypto-friendly environment, the Dow Jones Industrial Average registered its longest losing streak since 2018. In contrast, the tech-heavy Nasdaq hit a record high, propelled by gains in the Magnificent Seven (Mag7), with Tesla leading the charge, jumping over 6%.

💼Investors Await FOMC Rate Decision

All eyes are now on the upcoming FOMC meeting, where a 25-basis-point cut in the federal funds rate is widely expected. However, the key focus remains on the rate trajectory for 2025. Recent inflation data, which suggests persistent price pressures, raises concerns that momentum for further rate cuts could be derailed.

🐳Bitcoin Hits Record High

Bitcoin surged to an all-time high of $106,000, boosting risk-on sentiment across crypto-related equities. Companies like Coinbase and MicroStrategy rallied, while Bitcoin miners Marathon Digital Holdings (MARA) and Riot Platforms (RIOT) saw significant gains. Sentiment was further lifted by Trump’s pledge to position the United States as the global hub for crypto innovation.

🚦China’s Economic Struggles Persist

China’s latest economic data continued to disappoint. Retail sales fell short of expectations, while housing prices remain under pressure. While the economy is on track to meet its 5% growth target for 2024, many economists are scaling back projections for next year to 4.8%, with further downward revisions possible if Trump’s tariff threats materialize.

📪Upcoming Core Retail Sales Data

At 9:30 PM (ET), the Core Retail Sales data for the US will be released. Analysts are anticipating robust growth compared to the previous period. A strong print could ease recession fears and set the stage for a year-end Santa Rally.