Category: Market News

U.S. equity futures pointed to a muted open on Tuesday, suggesting stocks may struggle to gain traction after a volatile session on Monday ended modestly lower.

Market participants appear hesitant as they digest a mixed batch of U.S. labor market data, which offers conflicting signals about the pace of economic momentum.

According to the Labor Department, nonfarm payrolls increased by 64,000 in November, beating expectations for a 50,000 gain. However, the improvement followed a sharp downward revision in October, when payrolls fell by 105,000.

At the same time, the unemployment rate rose to 4.6% in November from 4.4% in September, slightly exceeding forecasts for a move to 4.5%.

Meanwhile, data from the Commerce Department showed that retail spending lost momentum in October. Overall retail sales were flat following a modest upward move in September, missing consensus estimates for a 0.2% increase.

Excluding autos, retail sales posted a stronger showing, rising 0.4% in October after a 0.1% gain the previous month, beating expectations.

On Monday, stocks initially advanced as investors looked for bargains after Friday’s sharp selloff, but the rally faded quickly. The major indexes spent most of the session near flatline levels before closing modestly lower.

The Nasdaq led losses, falling 0.6%, while the S&P 500 slipped 0.2% and the Dow Jones Industrial Average edged down 0.1%.

Concerns about elevated artificial intelligence spending continued to weigh on technology shares, particularly companies such as Broadcom (NASDAQ:AVGO) and Oracle (NYSE:ORCL). Investors also remained cautious ahead of upcoming economic releases that could shape interest-rate expectations.

Although the Federal Reserve delivered a widely expected quarter-point rate cut last week, policymakers’ projections revealed notable disagreement over how aggressively rates may be lowered going forward.

Sector performance reflected the broader uncertainty, with hardware and software stocks extending recent declines, while healthcare and pharmaceutical shares outperformed the wider market.

European equity markets were mixed on Tuesday after posting broadly positive moves in the previous session, as investors digested fresh economic data and company news.

France’s CAC 40 was edging up around 0.1%, while Germany’s DAX slipped 0.3%. In London, the FTSE 100 underperformed, falling about 0.5%.

Earlier in the day, data from the Office for National Statistics showed the U.K. unemployment rate ticked higher in the three months to October. The jobless rate rose to 5.1%, compared with 5.0% in the prior period.

Average earnings excluding bonuses increased 4.6% year on year in the three months to October, slightly ahead of the 4.5% growth expected by economists. Meanwhile, the number of payroll employees fell by 171,000, or 0.6%, in November compared with a year earlier. On a month-on-month basis, however, employment increased by 38,000 to 30.3 million.

In corporate developments, Rolls-Royce (LSE:RR.) shares moved lower despite the engine maker announcing plans to begin a £200 million interim share buyback programme on January 2, 2026.

Centrica (LSE:CNA) also declined after the British energy group sold Spirit Energy’s 15% stake in the Cygnus gas field to Serica Energy for £98 million.

By contrast, IG Group Holdings (LSE:IGG) jumped after the online trading company extended its share buyback scheme and reported a 29% rise in organic trading revenue for the quarter ended November 30.

Shares in Holcim (TG:HLBN) advanced after the Swiss cement producer said it had agreed to pay $550 million for a majority stake in a Peruvian building materials business.

Swedish telecoms equipment maker Ericsson (NASDAQ:ERIC) also gained ground after announcing a five-year Master Frame Agreement with stc Group aimed at boosting Saudi Arabia’s digital infrastructure.

Futures tied to the major U.S. equity indices traded modestly lower, pointing to a cautious start to the week as investors positioned themselves ahead of a heavy slate of economic releases, led by a long-awaited update on the labour market. Attention is also focused on potential shifts in market structure, with reports that Nasdaq is seeking regulatory approval to lengthen trading hours, while homebuilder Lennar is set to report earnings.

Futures signal early caution

U.S. equity futures edged down in early dealings, reflecting a defensive tone ahead of key macroeconomic data, particularly employment figures.

At around 02:45 ET, Dow futures were lower by 185 points, or 0.4%, S&P 500 futures slipped 47 points, or 0.7%, and Nasdaq 100 futures declined 261 points, or 1.0%.

The move follows a weak session on Wall Street, which marked a subdued start to the final full trading week of 2025. Attempts at a rebound on Monday faded quickly, as analysts continued to question the durability of the rally driven by artificial intelligence. Those concerns were reinforced by disappointing guidance and spending plans from AI-linked companies such as Broadcom (NASDAQ:AVGO) and Oracle (NYSE:ORCL).

Investors also weighed reports suggesting resistance to the potential appointment of White House economic adviser Kevin Hassett as Federal Reserve Chair. Hassett has been seen as supportive of President Donald Trump’s push for swift and aggressive rate cuts, though CNBC reported growing unease among some officials over his close ties to the administration.

By the end of Monday’s session, both the S&P 500 and the Nasdaq Composite had posted their steepest daily declines in more than three weeks.

Payrolls take centre stage

Market focus now turns to a series of U.S. economic indicators due later in the day, which could offer fresh insight into the health of the American economy and influence expectations for future Federal Reserve policy.

At the forefront is the November nonfarm payrolls report from the Bureau of Labor Statistics. Economists surveyed by Reuters forecast a relatively modest increase of around 35,000 jobs. The report will also incorporate October payroll data, which were not released at the time due to a data blackout during a record-length federal government shutdown.

A new unemployment rate will also be published. Because the shutdown lasted 43 days, October’s unemployment data were never collected, resulting in an unprecedented break in the series.

Additional releases scheduled include retail sales figures and a preliminary reading on business activity. Later in the week, the BLS is set to publish November consumer price inflation data, amid uncertainty over how much information from the cancelled October report will be reflected.

The data follow the Federal Reserve’s decision last week to cut interest rates by 25 basis points, aimed at supporting employment while inflation pressures remain stable, though elevated. Notably, policymakers did not have access to the latest economic data at the time, making this week’s releases potentially influential for the Fed’s policy outlook.

Nasdaq seeks extended trading hours – report

Nasdaq is reportedly seeking approval from U.S. regulators to significantly expand trading hours on its stock exchanges, potentially allowing trading for up to 23 hours a day on weekdays, according to Bloomberg News.

In a filing submitted to the Securities and Exchange Commission on Monday, Nasdaq requested authorisation to add an overnight trading session running from 9 p.m. to 4 a.m. ET, on top of its existing pre-market, regular and after-hours sessions.

The initiative reflects surging global demand for U.S. equities, prompting regulators to consider proposals to extend trading beyond traditional hours. U.S. stocks account for roughly two-thirds of global equity market value, while foreign ownership of U.S. shares reached $17 trillion last year, according to Nasdaq data cited by Reuters.

Nasdaq has also been exploring a shift towards near round-the-clock trading five days a week. Earlier this year, Nasdaq President Tal Cohen said discussions with regulators were under way, with any changes potentially taking effect in the second half of 2026.

Lennar earnings in focus

The corporate earnings calendar is relatively light, with the spotlight on results from homebuilder Lennar Corporation (NYSE:LEN), due after U.S. markets close.

In a note to clients, analysts at Vital Knowledge said sentiment around the stock remains “cautious,” as “the housing industry’s downturn looks set to persist for several more quarters given muted demand and margin headwinds.”

According to Bloomberg consensus estimates, Lennar is expected to report adjusted earnings of $2.24 per share on revenue of $9.1 billion for its fiscal fourth quarter, with net new orders forecast at 20,288.

The company posted a 46% drop in profit in the third quarter, pressured by stubborn inflation that has eroded housing affordability. Despite the Fed’s renewed rate-cutting cycle, U.S. government bond yields have remained relatively elevated, keeping mortgage rates high. Lennar has responded with sales incentives such as mortgage rate buydowns and pricing adjustments, though these measures risk squeezing margins.

Oil prices fall on Ukraine peace optimism

Oil prices moved lower as optimism grew over the possibility of progress toward a Russia–Ukraine peace agreement, raising the prospect of sanctions being eased.

Brent crude futures fell 1.2% to $59.82 a barrel, while U.S. West Texas Intermediate declined 1.3% to $55.95 a barrel.

U.S. officials have pointed to tentative advances in talks, with Ukraine reportedly willing to abandon its bid to join NATO — a key Russian demand — while Washington has offered security guarantees. However, negotiations over territorial concessions remain unresolved.

Any agreement could eventually lead to the lifting of U.S. sanctions on Russian oil producers, potentially adding supply to an already well-supplied global market.

European equities opened modestly lower on Tuesday, tracking overnight weakness on Wall Street, though declines remained limited as investors prepared for a week packed with key central bank announcements.

By 08:05 GMT, Germany’s DAX was down 0.6%, France’s CAC 40 slipped 0.2%, and the UK’s FTSE 100 eased 0.1%.

Central banks in focus

Market sentiment was weighed down by losses in U.S. equities, where technology stocks continued to retreat overnight. That weakness spilled into Asian markets, following renewed selling pressure in the tech sector sparked last week by disappointing outlooks and heavy spending plans from Broadcom (NASDAQ:AVGO) and Oracle (NYSE:ORCL).

Despite this backdrop, investors in Europe are primarily focused on upcoming monetary policy decisions as the year draws to a close. The European Central Bank is widely expected to leave interest rates unchanged at 2% on Thursday, with recent indicators pointing to a gradual recovery across the eurozone.

Elsewhere, Sweden’s Riksbank and Norway’s Norges Bank are also due to announce their final policy decisions of 2025 this week. In the UK, the outcome of the Bank of England meeting is seen as finely balanced, although markets broadly expect policymakers to deliver another rate cut.

U.S. payrolls in the spotlight

Later in the session, December business activity data for Europe are due to be released. In the UK, unemployment has already climbed to 5.1% in the three months to October, marking a post-pandemic high.

Globally, attention is firmly on the delayed U.S. nonfarm payrolls report for November. The data come after the Federal Reserve cut interest rates last week and signalled the possibility of further easing next year. Economists surveyed by Dow Jones expect job growth of around 50,000, sharply lower than the 119,000 positions added in September.

Corporate news

In company updates, TotalEnergies (EU:TTE) announced a 21-year power supply agreement with Alphabet-owned Google, under which it will provide 1 terawatt hour of renewable electricity to support Google’s data centre operations in Malaysia.

Rolls-Royce (LSE:RR.) said it plans to launch a £200 million interim share buyback programme in January, following the completion of its £1 billion repurchase programme in November 2025.

Oil prices retreat on Ukraine peace hopes

Oil prices moved lower as optimism grew around the potential for progress in Russia–Ukraine peace talks, raising the prospect of an eventual easing of sanctions.

Brent crude futures fell 0.8% to $60.04 a barrel, while U.S. West Texas Intermediate slipped 0.9% to $58.18 a barrel.

U.S. officials indicated some advances in discussions, with Kyiv reportedly willing to abandon its bid to join NATO, a long-standing Russian demand, while Washington has offered security guarantees to Ukraine. However, negotiations over territorial concessions remain unresolved.

Any peace agreement could ultimately lead to the lifting of U.S. sanctions on Russian oil producers, potentially adding further supply to an already well-balanced global market.

Anglo American PLC (LSE:AAL) and Teck Resources (NYSE:TECK) announced on Tuesday that they have secured approval from the Canadian government for their proposed combination, a transaction set to form one of the largest copper producers globally.

Anglo revealed in September its plan to acquire Teck in an all-share deal valued at more than $20 billion. Once completed, the transaction is expected to create a mining group with an enterprise value exceeding $50 billion, anchored by a portfolio of world-class copper assets.

As part of the agreement, the companies have pledged significant long-term investment in Canada, committing at least C$4.5 billion (around $3.27 billion) over the next five years and roughly C$10 billion over a 15-year period.

The government’s approval comes despite reservations expressed by some Canadian ministers during the review process. Shareholders of both Anglo American and Teck have already voted in favour of the transaction over the past two months.

In regulatory terms, the deal has also received competition clearance in Canada and Australia. However, approvals from authorities in China, the United States, Chile and Peru are still outstanding before the acquisition can be finalised.

Kering (EU:KER) has entered into a joint venture with investment firm Ardian for a prime commercial property located on Fifth Avenue in New York, the two groups confirmed on Tuesday.

Under the terms of the deal, Ardian will own 60% of the newly formed vehicle, with Kering retaining the remaining 40%. The transaction values the property at $900 million (€766 million) and is expected to deliver net cash proceeds of $690 million (€587 million) to Kering. Kering’s stake in the joint venture will be accounted for using the equity method with immediate effect.

The asset, located at 715–717 Fifth Avenue, consists of multi-storey luxury retail space covering roughly 115,000 square feet (10,700 square metres). The property is positioned as a long-term strategic retail location within one of the world’s most prestigious shopping districts.

“As we continue to execute our strategy regarding the management of our real estate portfolio, we are pursuing our successful partnership with leading investment firm Ardian,” said Jean-Marc Duplaix, Kering Chief Operating Officer.

“Like the investment agreement already signed in Paris, this transaction allows us to secure another long term highly prominent retail location for our Houses while enhancing our financial flexibility.”

For Ardian, the deal represents its first real estate investment in the United States. Stéphanie Bensimon, Member of the Executive Committee and Head of Real Estate at Ardian, said the Fifth Avenue property offers “exceptional visibility and long-term value.”

Omar Fjer, Head of Real Estate France and Managing Director at Ardian, added that the transaction “reflects Ardian’s expertise in structuring innovative partnerships and securing assets with exceptional fundamentals.”

Kering is a global luxury group with a portfolio that includes Gucci, Saint Laurent and Balenciaga. The group employed around 47,000 people and reported revenue of €17.2 billion in 2024.

Eurozone business activity continued to expand in December, marking a full year of growth for the first time since the COVID-19 pandemic, according to HCOB Flash PMI data released on Tuesday. However, the pace of expansion slowed towards the end of the year, signalling a more fragile economic backdrop.

The HCOB Flash Eurozone Composite PMI Output Index slipped to 51.9 in December from 52.8 in November. While the reading remains above the 50 threshold that separates growth from contraction, it points to a deceleration in overall activity.

Growth continued to be driven by the services sector, where the PMI eased to 52.6 from 53.6, a three-month low but still indicative of solid expansion. Manufacturing performance weakened, with the output index falling to 49.7 from 50.4, ending a nine-month run of growth and returning the sector to contraction territory.

At a country level, Germany saw output growth slow to a four-month low, while France came close to stagnation with only marginal expansion. Other eurozone economies continued to grow, albeit at a slower pace than in November.

Demand conditions softened. New orders rose for a fifth consecutive month but at a reduced rate, while new export orders declined at their sharpest pace since March. The fall was led by manufacturing, though services also experienced weaker export demand.

Employment across the eurozone increased for the third month in a row, with job creation slightly stronger than in November. Germany recorded a small decline in employment, while France posted marginal gains and the rest of the bloc saw modest growth.

Inflationary pressures picked up during the month. Input costs rose at their fastest pace in nine months, while output price inflation remained moderate but edged higher compared with November. Despite this monthly acceleration, average inflation levels for both input and output prices over the year were the lowest since 2020.

Business sentiment deteriorated, with overall confidence falling to a seven-month low. Optimism among service providers dropped notably, particularly in Germany where confidence sank to its weakest level in nearly two and a half years. In contrast, manufacturing optimism improved to its highest level since February 2022.

“Economic growth slowed at the end of the year due to a slight contraction in the manufacturing sector and weaker momentum in the service sector,” said Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank. “All in all, the runway into the new year seems pretty unstable.”

De la Rubia added that inflation in the services sector climbed to a nine-month high, a development that likely reinforced the European Central Bank’s decision to keep interest rates unchanged at its 18 December meeting.

Van Elle Holdings (LSE:VANL) said revenue rose by 12% in the first half of its financial year, covering the six months to 31 October 2025, even as trading conditions across the construction sector remained challenging. The group expects to post revenue of around £73 million for the period, up from £65 million a year earlier.

The increase was largely driven by higher activity levels in the General Piling and Strata Geotechnics divisions, reflecting improved project volumes and a solid order flow in specialist ground engineering services.

Van Elle also continued to build momentum in the UK Energy and Water markets. Within Energy, the company is progressing investigation and design work on the Beauly to Loch Buidhe transmission scheme for Wood Group and has commenced its first transmission projects with M Group. In Water, Strata Geotechnics secured a position on United Utilities’ AMP8 soil investigation framework and is delivering several wastewater treatment schemes alongside contractors including Galliford Try, Kier and Costain.

Management noted that market conditions remain difficult, particularly due to ongoing delays linked to Building Safety Act approvals for high-rise residential developments. However, the Board welcomed a recent update from the Building Safety Regulator confirming that staggered applications for new high-risk buildings will soon be permitted, a change expected to help speed up approvals during 2026.

Van Elle is scheduled to publish its interim results on 26 January 2026 and said it remains confident of delivering full-year performance in line with market expectations, including underlying profit before tax of £3.0 million from continuing operations.

UK equities opened marginally lower on Tuesday, while sterling remained firm against the US dollar, as investors digested fresh labour market data showing unemployment at its highest level since the pandemic. European markets also traded weaker in early dealings.

By 08:03 GMT, the FTSE 100 was down 0.05%, while the pound edged 0.09% higher against the dollar, trading above 1.33. On the continent, Germany’s DAX fell 0.6% and France’s CAC 40 slipped 0.2%, reflecting a broadly cautious tone across European markets.

UK economic update

Data from the Office for National Statistics showed that the UK unemployment rate rose to 5.1% in the three months to October, up from 5.0% previously and marking a post-pandemic high. Meanwhile, annual pay growth excluding bonuses eased to 4.6%, down from a revised 4.7% in the prior period. Together, the figures have strengthened expectations that the Bank of England could move towards an interest rate cut later this week.

Corporate highlights

Rolls-Royce Holdings PLC (LSE:RR.) announced plans to launch a £200 million interim share buyback programme from 2 January 2026. The move follows the completion of its £1 billion buyback in November 2025, with the new programme set to run until 24 February 2026, ahead of full-year results due on 26 February.

SThree Plc (LSE:STEM) said its FY25 performance is expected to be in line with previously issued profit before tax guidance of £25 million. Although group net fees declined 12% year on year, the company reported steady quarter-on-quarter improvement, with the US business returning to growth.

Goodwin PLC (LSE:GDWN) delivered a sharp increase in profitability for the six months to 31 October 2025. Trading profit rose to £37.2 million from £17.1 million a year earlier, while revenue climbed 27.4% to £135.6 million. Gross margins also strengthened significantly over the period.

AstraZeneca PLC (LSE:AZN) secured European Union approval for Saphnelo (anifrolumab) as a subcutaneous, self-administered treatment for adults with systemic lupus erythematosus. The decision follows positive Phase III TULIP-SC trial data and allows patients to use a pre-filled pen alongside standard therapy.

Serica Energy PLC (LSE:SQZ) agreed to acquire a portfolio of Southern North Sea assets from Spirit Energy Limited for £57 million, with completion expected in the second half of 2026.

IG Group Holdings PLC (LSE:IGG) reported a 29% increase in organic trading revenue for the quarter ended 30 November, supported by strong new customer growth. The group also extended its share buyback programme by £75 million to a total of £200 million, now expected to complete by the end of March 2026, and slightly upgraded its revenue growth outlook for calendar year 2026.

Elsewhere, water regulator Ofwat confirmed an £11 million enforcement package against Wessex Water over failures in operating and maintaining its wastewater network. In the energy sector, Shell PLC (LSE:SHEL) saw its head of mergers, Greg Gut, depart following the rejection of an internal proposal to acquire BP, according to reports.