The Federal Reserve is struggling to cool inflation as wages and the service sector inflation continue to stay above the Fed's target rate of inflation.

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Wall Street rally is hitting the wall of reality, and investors begin to factor in the negative impact of higher Trump tariffs in keeping inflation elevated, forcing the Fed to keep rates higher for longer.

A five-week market rally begins to fade as fewer stocks participate in the upswing amid growing skepticism about President-elect Trump's tariff plans and the federal government's budget deficit. 

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A rally in tech stocks extended U.S. major averages gains to the fifth consecutive week. Broadcom extended gains of the previous week, driven by optimism about artificial intelligence revenue growth.

Eight central banks around the world are scheduled to announce their rate decisions this week. The U.S. Federal Reserve, the Bank of England, and Riksbank are expected to raise their policy rates, but the Bank of Japan may delay its rate increase till the next policy meeting in January. 

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Wall Street indexes extended weekly gains to the fourth consecutive week after tech stocks rebounded in Friday's trading. For now, investors are overlooking the lack of progress in cooling the core rate of inflation to the Fed's target rate of 2%.

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Wall Street indexes struggled to rise above the flatline after producer price inflation accelerated in November. Investors in Europe held out for additional rate cuts after the ECB lowered rates as widely anticipated. China's leaders offered another vague commitment for additional fiscal stimulus measures.



Producer price inflation accelerated in November, and the core inflation rate stalled above 3% annual rate, indicating the Federal Reserve's inability to cool inflation to its target rate of 2%. 

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Market indexes across the Atlantic edged higher amid a broad surge in tech and interest rate-sensitive stocks following an inflation report. Investors are looking for concrete plans from Chinese authorities to implement fiscal stimulus measures. 

The core consumer price inflation rate was unchanged at 3.3% and has stayed above 3% since April 2021, confirming the difficult task for policymakers in bringing down inflation to 2%.

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U.S. markets traded sideways ahead of inflation reports, and European markets lacked momentum ahead of rate decisions this week. China's strong exports highlight steady demand growth in Asia, Europe, and the U.S. 

U.S. major averages retained upward bias amid positive market sentiment and a stable economic backdrop. Despite the slowdown in inflation, wages and prices are still rising at a faster pace inconsistent with the Fed's long-term goal of 2% inflation.

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Wall Street indexes traded sideways as investors reviewed last week's updates on the labor market, international trade, and factory orders. The expectations of one more rate cut after the policy meeting next week kept market sentiment positive.

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Investors on Wall Street held out for one more rate cut after the next policy meeting this month after the nonfarm payrolls report suggested strong but not too-hot labor market conditions.

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Stock market indexes in the U.S., Europe, Japan, and India traded in a tight range as investors awaited rate decisions over the next two weeks. Market indexes in China and HK struggled to stay above the flatline amid faltering economic growth outlook and looming trade tensions with the U.S.