Overnight US stocks | The three major stock indexes are mixed, the market is cautious before the Federal Reserve interest rate decision, and silver has broken through $60 to set a new high.

On Tuesday, the three major stock indexes showed mixed movements. The market was waiting for the upcoming Federal Reserve interest rate decision. It is almost certain that the Federal Reserve will cut interest rates on Wednesday, but investors are more concerned about whether the post-meeting statement and future guidance will lean towards a hawkish stance. As the market is overall in a waiting and watching state, both stocks and bonds prices are fluctuating within a narrow range. JPMorgan Chase's next year's cost expenditures exceeded expectations, leading to the largest single-day drop in stock price since April. Demand for US Treasury bond sales exceeded expectations, but the 10-year US Treasury yield remains close to a three-month high. Spot silver broke through the $60 mark, hitting a historical high. [US Stock Market] At the close, the Dow fell 179.03 points, or 0.38%, to 47560.29; the Nasdaq rose 30.58 points, or 0.13%, to 23576.49; the S&P 500 fell 6.00 points, or 0.09%, to 6840.51. Tech stocks performed relatively well, supporting the Nasdaq's slight increase. Micron Technology, Inc.(MU.US) rose by over 2%, with Adobe(ADBE.US), Broadcom Inc.(AVGO.US), Tesla, Inc.(TSLA.US), and Alphabet Inc. Class C(GOOGL.US) all rising by over 1%. [European Stock Market] The German DAX30 index rose by 116.64 points, or 0.49%, to 24162.65; the UK FTSE 100 index fell by 3.08 points, or 0.03%, to 9642.01; the French CAC40 index fell by 55.92 points, or 0.69%, to 8052.51; the Euro Stoxx 50 index fell by 9.24 points, or 0.16%, to 5716.35; the Spanish IBEX35 index rose by 22.30 points, or 0.13%, to 16734.50; the Italian FTSE MIB index rose by 141.68 points, or 0.33%, to 43574.50. [Asia-Pacific Stock Market] The Nikkei 225 index rose by 0.14%, the KOSPI index in South Korea fell by 0.27%, the BSE SENSEX in India fell by 0.51%, and the Composite Index in Indonesia fell by 0.61%. [Foreign Exchange] The US Dollar Index (DXY), which measures against six major currencies, rose by 0.15% to 99.24. [Cryptocurrencies] Cryptocurrencies rose. Bitcoin rose by 2.28% to $92,708, and Ethereum rose by 6.15% to $3,316.78. [Precious Metals] COMEX gold futures rose by 0.44% to $4,236.45 per ounce. Spot gold rose by 0.42% to $4,208.39 per ounce. Spot silver rose by 4.33% to $60.67 per ounce, breaking the important psychological barrier of $60 and hitting a historical high. [Crude Oil] WTI January crude oil futures fell by 1.07% to $58.25 per barrel, while Brent February crude oil futures fell by 0.88% to $61.94 per barrel. [Metals] LME copper futures fell by $148 to $11,487 per ton, LME aluminum futures fell by $32 to $2,856 per ton, LME zinc futures fell by $31 to $3,090 per ton, LME lead futures fell by $20 to $1,978 per ton, LME nickel futures fell by $106 to $14,734 per ton, LME tin futures fell by $26 to $39,858 per ton, and LME cobalt futures remained unchanged at $52,220 per ton. [Macro News] "Shadow Fed Chairman" Hassett: Fed has "sufficient room" for rate cuts, which means a cut of more than 25 basis points. Kevin Hassett, a top candidate for the next Federal Reserve chairman, stated that the Fed still has "sufficient room" for further rate cuts, but if inflation rises, the situation may change. When asked if he would push for the "substantial rate cut" expected by the president if he ultimately became Fed chairman, Hassett, who currently serves as the chairman of the White House National Economic Council, said: "If the data suggests we can do that, then - just like now - I believe there is enough room to do so." When asked if this means a rate cut of more than 25 basis points, Hassett responded, "Yes." President Trump himself stated in an interview on Tuesday that a rapid reduction in borrowing costs would be the "litmus test" for his selection of the next Federal Reserve chairman. When asked whether, if appointed as the Fed chairman, his loyalty would lean towards Trump or his independent economic judgment, Hassett stated that he would adhere to "my judgment, and I think the President trusts my judgment." When asked what he would do if Trump asked him to cut rates but he believed it was inappropriate, Hassett said, "If the inflation rate rises from 2.5% to 4%, we cannot cut rates." Strong demand for US bond auctions, ten-year US bonds still fall. On Tuesday, the US Treasury auctioned $39 billion in 10-year Treasury bonds, which were sold at a high yield of 4.175%, higher than the 4.068% in November last year, reaching the highest level since August. The auction demand indicators were robust. The bid-to-cover ratio rose from 2.433 in November to 2.550, the highest since September, and higher than the recent average of 2.51. Although the auction demand was strong, it did not boost the bond market sentiment, with the 10-year US Treasury yield remaining around 4.17%, close to a three-month high. The market's expectation for additional rate cuts next year has significantly diminished this month, pushing the 10-year Treasury yield to touch 4.19% yesterday, the highest since the end of September. Traders on Monday were no longer fully digesting expectations of two additional rate cuts. US October JOLTS job openings rise to a five-month high, but hiring decreases and layoffs reach a two-year high. According to data released by the US Bureau of Labor Statistics on Tuesday, job openings in October rose slightly to 7.67 million from the previous month's 7.66 million, higher than the median expectation of economists. Due to the government shutdown, the data for the past two months has been delayed. Meanwhile, the JOLTS report showed that layoffs in October rose to 1.85 million, the highest since early 2023. Layoffs were mainly concentrated in the accommodation and food services industry. This industry differentiation indicates that some employers are adjusting to cope with a higher cost environment, partly influenced by US trade policies, while economic uncertainty continues to exist. Other data also showed an increase in layoff announcements. The number of job openings decreased by 218,000 to 5.15 million in October from September, a decrease of over 4%. The so-called "quit rate," which measures the percentage of voluntary resignations per month, fell to the lowest level since May 2020 in October, indicating a weakened confidence among workers in finding new jobs. These indicators suggest that while job openings data appear promising, the labor market is actually slowing down further, with demand for labor in some industries significantly cooling off. Ahead of the Federal Reserve decision, investors flocked to US money market funds and sold US stock funds for the second consecutive week. As the Federal Reserve policy decision approaches, risk aversion dominates the flow of funds in the US market. Investors are withdrawing from higher-risk stock funds and parking large sums of money in safer money market funds to deal with the upcoming market uncertainty. Data from LSEG Lipper shows that, as of the week ending December 3, investors bought approximately $104.75 billion in US money market funds. This is the largest single-week net inflow into this asset class since November 5, showing a high level of defensiveness in the market before the Federal Reserve releases its policy statement on Thursday. Meanwhile, despite the widespread expectation of a rate cut by the Federal Reserve, investors remain cautious amidst overvalued large tech stocks. US stock funds experienced net sales of approximately $3.52 billion in the week, showing a net outflow trend for the second consecutive week as preference for safe-haven assets significantly increased. Howard Marks warns: AI's impact on employment is "frightening," tech giants piling on debt planting hidden dangers. Howard Marks, co-founder of Oaktree Capital Management, warns that AI could have a "scary" impact on employment, and the market's optimistic expectations for productivity gains overlook societal resilience. Marks stated that due to AI being a "winner-takes-all arms race," companies such as Microsoft Corporation, Alphabet, Amazon.com, Inc., Meta, and Oracle Corporation have to undertake "aggressive-scale" debt, which could also exacerbate social and political divisions. He stated, "It's reasonable to assume that one of the reasons they have sunk so much money into this is to make life hard for smaller companies." Marks pointed out that although the growth in demand for AI technology is "completely unpredictable," investors' behavior shows "speculative" tendencies. [Individual Stock News] Cost expenditure guidance for next year exceeds expectations, JPMorgan Chase (JPM.US) fell by 4.7%, hitting the largest single-day drop since April. Marianne Lake, the current CEO of JPMorgan Chase's Consumer and Community Banking division, stated on Tuesday that the bank expects next year's expenditures to reach $105 billion, which is higher than the average analyst expectation of $101.1 billion and the highest analyst expectation. Lake expects that the largest driver of cost growth is "expenditure related to business scale and growth." She also noted that the current consumer environment is "slightly fragile," with strategic investments and the "structural impact of inflation" being important reasons. Lake stated that the Consumer and Community Bank division she oversees is a "significant factor" driving overall expenditure growth. She cited examples such as incentive compensation for financial advisors, product marketing, branch construction, and investment in artificial intelligence as reasons for the increase in costs. PepsiCo, Inc. (PEP.US) compromises with aggressive shareholders for "self-rescue": plant closure, layoffs, and a reduction of 20% of products in the US market. Facing declining performance and shareholder pressure, PepsiCo, Inc. has reached a strategic reform agreement with the aggressive investment firm Elliott Investment Management, aiming to address current growth challenges through business streamlining, cost restructuring, and product focus. According to the plan announced on December 9, PepsiCo, Inc. will implement the following structural adjustments by 2026: cut nearly 20% of product lines (SKUs) in the US market, close three factories and promote layoffs and production line optimization, and shift resources to value products and healthy innovation. This plan directly addresses Elliott's previous criticism of its "bloated brands and market share loss." This collaboration stems from Elliott's approximately $4 billion stake in PepsiCo, Inc. established in 2024. Against the backdrop of PepsiCo, Inc.'s stock price falling by about 25% from its high point in 2023 and facing competition pressure in both carbonated drinks and snacks, the agreement is seen as a proactive measure by management to drive reform and avoid potential proxy contest. The company simultaneously updated its performance guidance, expecting organic revenue growth of 2%-4% in 2026, and targeting to increase the core operating profit margin by at least 100 basis points within three years. Gemini 3 surpasses downloads but loses habits? ChatGPT still monopolizes 90% of mobile conversations, with an average daily opening of over 8 times. Despite Alphabet Inc. Class C's latest model Gemini 3 boosting downloads, OpenAI's ChatGPT continues to maintain overwhelming superiority in user habits and activity. Data from Sensor Tower shows that in late November, ChatGPT accounted for nearly 90% of mobile chat conversation volume, while Gemini accounted for only about 4%. At the same time, ChatGPT users open the app over 8 times per day, far exceeding Gemini's 2.5 times. Alphabet Inc. Class C's brief lead in downloads highlights a key issue - in the AI product market, attracting users to try out products and cultivating usage habits are two different battles, with the latter being much more challenging. This AI competition is shifting from grabbing new users to competing for user time, which determines who can truly convert AI products into daily habits.