On December 20th, US time, the three major indices of the US stock market rallied collectively, showcasing a vibrant optimism in the financial landscapeBy the close of trading, the Dow Jones Industrial Average surged by 498.02 points, marking a 1.18% increase to finish at 42,840.26 pointsSimilarly, the Nasdaq Composite and the S&P 500 indices rose by 199.83 points and 63.77 points respectively, reflecting increases of 1.03% and 1.09%. These movements emphasized the resilience of the markets amid ongoing economic fluctuations.

The backdrop of this bullish sentiment was complemented by a release of pertinent economic dataThe core Personal Consumption Expenditures (PCE) price index for November displayed a year-on-year increase of 2.80%, falling short of expectations which foresaw a rise of 2.90%. This mild performance in inflation data suggests a cooling economic environment, bolstering investor confidence

Month-over-month, the core PCE only rose by 0.1%, again below the anticipated 0.2%, which further supports the narrative of easing inflationary pressures.

In reflections from various Federal Reserve officials on December 20th, there were indications of a potential pivot in future monetary policy considerationsFed Vice Chairman John Williams articulated that the current data suggests a deceleration in the US economy, coupled with a less tense labor market, implying that the baseline expectation could involve future interest rate cutsWilliams stressed that the Fed's current policy stance is "quite tight," putting it in a beneficial position while subtly hinting at possible shifts in the neutral interest rate level over time.

However, the internal discussions among Fed officials revealed a divergence of opinions regarding immediate rate cutsCleveland Fed President Loretta Mester voiced her dissent in the recent policy meeting, advocating for the maintenance of interest rates until inflation demonstrated a more substantial decline

• Foreign Investment in India Surges by 42%
• ETF Market Surpasses 200 Billion Yuan
• Global Venture Capital Tightens, But AI Continues to Thrive
• Mengniu's Decline: A Reflection of China's Consumer Market
• Evaluating Market Predictions through Macroeconomic Data

Mester's rationale pointed towards the current rates being near a "neutral level", arguing against urgent adjustments, "I prefer to keep our policy unchanged until we see a further reduction in inflation towards our 2% target," she stated.

Conversely, several of her colleagues expressed a preference for a gradual reduction in ratesFederal Reserve Bank of Atlanta President Raphael Bostic noted that despite a recent uptick in inflation, the fluctuations are transient and the ultimate target remains firmly set at 2%. He posited that the Fed might consider moderate rate cuts by 2025, projecting a possible downturn in rates within the next 12 to 18 months, suggesting that "the current policy rate is restrictive, but not overly harsh, thereby allowing the Fed to continue easing its stance."

Moreover, Andrew Hollenhorst, an economist with Citigroup, indicated that the easing labor market could further encourage the Fed to pursue continuous rate cuts in forthcoming meetings

Hollenhorst highlighted that, despite a strong market expectation for a pause in rate cuts in January 2024, the underlying impetus from inflation and unemployment data still persists, suggesting that rate cuts remain a viable consideration.

In addition to these monetary policy narratives, attention was also drawn to the looming risk of a government shutdown in the United StatesReports from CCTV indicated that on December 20th, the House of Representatives passed a temporary funding bill aimed at averting a government "shutdown". This new legislation will provide operational funds for the federal government until March of the following year, thus averting scenarios where various federal agencies might cease operations after midnight on December 21st, Eastern Time.

The dollar index experienced a decline, illustrating a 0.73% drop which measured at 107.622, depicting a weaker dollar against six major currencies

In the foreign exchange markets, 1 Euro traded at 1.0445 dollars, slightly above the previous day’s 1.0362 dollars, while the Pound surged to 1.2599 dollars compared to the earlier value of 1.2505 dollars.

In the realm of international commodities, oil prices witnessed an uptickFor weekly trading conclusions, light crude oil futures for February delivery in New York climbed by 8 cents, settling at $69.46 per barrel, marking a 0.12% increaseSimilarly, Brent crude oil futures, also for February delivery, racked up a 6-cent gain to close at $72.94 per barrel, a rise of 0.08%.

The European Commission also granted unconditional approval for Nvidia's acquisition of the Israeli AI firm Run:ai, highlighting significant developments in the technology sectorRun:ai specializes in AI resource management software, and the EU concluded that the transaction would not threaten competition amongst its 27 member states, noting Nvidia's leading manufacturing status would remain intact

EU's antitrust chief, Teresa Ribera, assured that alternatives compatible with Nvidia's hardware would remain available, thereby addressing competitive concerns.

Run:ai has maintained a close partnership with Nvidia since 2020. Although the financial specifics of the transaction were not disclosed, Israeli media estimates positioned the valuation around $700 millionNvidia's previous largest acquisition in Israel was its $6.9 billion purchase of Mellanox Technologies in 2020. The EU's approval signals a quickened pace for Nvidia’s expansion within the AI chip market, even as its dominant position faces increased scrutiny and competitive pressure globally.

In tech-centric movements, Alphabet's Google experienced a rise of 1.54%. Recently, Google unveiled its experimental "Gemini 2.0 FlashThinking" model, marking the company’s inaugural AI inference model capable of vividly articulating its reasoning process to solve complex issues

This model, already deployed on Google AI Studio and Vertex AI platforms, signifies a stepping stone toward more advanced inferencing capabilities that might be integrated into future versions of the Gemini series.

Conversely, Microsoft shares slightly dipped by 0.10%. The company’s backing for OpenAI led to the unveiling of a next-generation reasoning model, o3, which is seen as a significant evolution from the previously released o1 "reasoning" modelSimilar to its predecessor, o3 is part of a model family, with o3-mini being a streamlined version tailored for specific tasksOpenAI’s President Greg Brockman underscored that the latest model represents a breakthrough, demonstrating impressive performance improvements on challenging benchmarks.

In the Court of Delaware, Arm’s minor uptick of 0.04% was met with ongoing scrutiny in its legal saga against Qualcomm, which is still deliberating on key aspects of the case

Arm has filed suit against Qualcomm to nullify its 2021 acquisition of Nuvia chip designs, integral to Qualcomm's ventures into the PC marketThe focal points of the case revolve around Nuvia's adherence to contracts with Arm and whether Qualcomm secured the necessary consent to use Arm's designsThe jury noted that they remain at an impasse on one contentious point regarding contract breach by Nuvia while discussions on the remaining two questions persist.

Meanwhile, Tesla shares faced a significant fall of 3.46%. The automaker announced a recall of 694,304 vehicles in the US due to issues with its tire pressure monitoring systemThis malfunction could lead to warning lights not illuminating properly across multiple driving cycles, potentially putting drivers at risk with underinflated tiresThe affected models include Model 3, Model Y, and Cybertruck, and the issue will be remedied through an over-the-air software update