Last night, global markets showed significant synchronized reactions as a set of unexpected employment data triggered a repricing of the Federal Reserve’s policy path. Major asset prices, including U.S. stocks, gold, and crude oil, all strengthened together, and market sentiment quickly heated up after the data release.

All three major U.S. stock indexes closed higher, with the Dow Jones Industrial Average rising 408 points in a single day, marking its largest monthly gain recently. The energy and financial sectors stood out, serving as the main drivers behind the index’s upward movement. Fund flows indicate that traditional cyclical sectors have regained favor. Notably, Chinese ADRs showed divergent performance, with new energy vehicle-related stocks coming under significant pressure.

The catalyst for the market’s sharp volatility was the U.S. November private sector employment data, which showed an unexpected decrease of 32,000 jobs. This weaker-than-expected performance immediately shifted market expectations for the December FOMC meeting:

The probability of a rate cut surged from about 60% to 89%, U.S. Treasury yields fell in response, and the U.S. Dollar Index weakened. Pricing in the interest rate derivatives market shows that traders now view a rate cut as highly likely.

The precious metals market also benefited from heightened expectations of monetary easing. The main New York gold futures contract broke through the key $4,232 per ounce level, displaying a clear technical breakout pattern. Analysts believe that the expectation of rate cuts, combined with geopolitical uncertainties, is providing dual support for gold prices.

In the energy market, a major oil pipeline in Eastern Europe was hit by an explosion, causing international oil prices to open higher and continue rising. Geopolitical supply risks have returned to the market’s focus, pushing crude prices even higher amid improving macro expectations.

The core logic of the current market is now very clear: all asset pricing is revolving around the expectation that the Federal Reserve is about to start a rate-cutting cycle. However, caution is warranted, as some conflicting signals have emerged within the market—for example, while U.S. stocks as a whole are rising, Chinese ADRs are falling against the trend; gold prices are hitting new highs, but fund flows show that risk-off sentiment has not fully intensified. This divergence may suggest that market consensus is not as unified as it appears on the surface.

Next week brings a dense schedule of key events: the Federal Reserve’s rate decision, the non-farm payrolls report, and the OPEC+ production policy meeting will all take place in the same week. The outcomes of these events will directly influence the market’s next directional choices.

At this point, investors need to calmly consider several core questions: Is the weakness in the job market a temporary disturbance or a structural trend? Has inflationary pressure truly been brought under control? Will geopolitical risks escalate further?

It is worth noting that when expectations for a particular policy path become too unanimous, it is often when risks are most easily overlooked. With a current 89% probability of a rate cut already priced in, any deviation from expectations could trigger significant market adjustments.

Market volatility is increasing. The above content is for informational purposes only and does not constitute any investment advice.