U.S. Indices closed firmer on Tuesday, and while the tech-heavy Nasdaq 100 underperformed, it managed to pare all weakness initially seen, driven by NVIDIA, amid The Information reports that Meta is considering using Google’s TPUs in its data centres in 2027. NVIDIA (-2.6%) still ended the day with losses, but the wider index managed to recover. Sectors overall were predominantly in the green, with Health and Consumer Discretionary sitting atop of the pile, with Utilities and Energy the only ones in the red. The latter was hit by weakness in the crude complex amid positive Ukraine/Russia peace deal developments, with President Trump most recently posting on Truth that there are only a few remaining points of disagreement, and as such is sending Witkoff to meet with Putin in Moscow, and Driscoll to meet with the Ukrainians. There was a deluge of US data (more below), but little really moved markets as PPI and retail sales were dated (Sept), although Consumer Confidence (Nov) was dismal. On the Fed footing, Miran was his usual dovish self, but the US yield curve steepened amid BBG reports that Hassett is seen as the frontrunner in Trump’s Fed Chair search. The Dollar was also sold, with money markets also moving more dovishly for December 2026; note, Powell’s term as Fed Chair expires in May 2026. Back to FX, as mentioned, the Dollar was sold with the Japanese Yen, Sterling and the Euro the gainers with focus on the UK budget on Wednesday. Antipodeans saw marginal gains as attention turned to the RBNZ overnight, whereby the central bank is widely expected to reduce rates by 25bps. Headline PPI in September rose 0.3%, in line with estimates and accelerating from August’s -0.1% print, while the Y/Y rate increased to 2.7%, matching forecasts and up from 2.6%. Core PPI (excluding food and energy) rose 0.1%, below the 0.2% forecast but above the previous -0.1%. The Y/Y rate was 2.6%, softer than both the 2.7% forecast and the 2.8% prior. The super-core measure, excluding food, energy and trade, rose 0.1% M/M from 0.3%, with the Y/Y rate at 2.9% from 2.8%. Analysts at Pantheon Macroeconomics said, “September’s PPI data show that the inflation impulse from the tariffs is modest and underlying services inflation is still slowing”. Components feeding into the PCE report were mixed: air fares rose 4.0% (prev. 0.7%), portfolio management fell 1.2% (prev. 1.6%), home health and hospice care jumped 1.2% (prev. 0.1%), outpatient hospital care fell 0.4% (prev. +0.2%), and nursing home care rose 0.7% (prev. -0.1%). Pantheon Macroeconomics estimates that September’s PPI and CPI data are consistent with a 0.22% increase in the core PCE deflator, maintaining the inflation rate at 2.9%. It added that the average core PCE inflation rate in Q4 2025 is likely to undershoot the median FOMC participants’ September forecast of 3.1% by one to two tenths, giving policymakers confidence to ease policy next month to support the labour market. The delayed September Retail Sales Report came in beneath expectations, with the headline rising 0.2%, albeit not as much as the expected 0.4% and the prior 0.6%; Retail Control (ex-building material, motor vehicle & parts, gasoline station & food svs, SA), a better gauge of core retail spending, unexpectedly declined 0.1% (exp. 0.3%, prev. 0.7%, rev. 0.6%). Note, in the Bank of America Consumer Checkpoint monthly data, they had anticipated that SA spending growth per household rose 0.2% M/M. Ex-Autos rose 0.3% in line with expectations (prev. 0.7%, rev. 0.6%), while ex-gas/autos rose 0.1% (prev. 0.7%, rev. 0.6%). Growth in the headline was supported by growth in miscellaneous store retailers (2.9%) and gasoline stations (2%), meanwhile the declines were seen in sporting goods, hobby, musical instrument, & book stores (-2.5%), clothing (-0.7%) and nonstore retailers (-0.7%). Oxford Economics writes that the slowdown in retail sales growth was largely due to an outright decline in non-store sales, which is likely a seasonal adjustment issue linked to the timing of sales by major online retailers. Given the report, the firm estimates personal spending is on track for a 0.44% gain in September. Consumer confidence for November was disappointing, as it fell to 88.7 from 94.6, much beneath the expected 93.4, tumbling to its lowest level since April – all five components of the overall index flagged or remained weak. The Present Situation Index dipped 4.3 points to 126.9, while the Expectations Index tumbled to 63.2 from 71.8. Chief Economist of the Conference Board Dana Peterson said the Present Situation Index dipped as consumers were less sanguine about current business and labour market conditions, while all three components of Expectations deteriorated in Nov. Consumers’ assessments of current business conditions worsened, as 20.1% said “good” (prev. 20.7% M/M) and 16.9% said “bad” (prev. 14.5%), while views of the labour market also weakened; 27.6% said jobs were “plentiful” (prev. 28.6%), however 17.9% said jobs were “hard to get” (prev. 18.3%). Looking ahead, and as alluded to, consumers were more pessimistic about future business conditions, more worried about the labour market, and income prospects were less positive. The weekly ADP preliminary estimate for the four weeks to Nov. 8, 2025, showed US private employers cut an average 13,500 jobs per week, compared with a four-week average decline of 2,500 in the period ending Nov. 1. ADP said “consumer strength remains in question as we enter the holiday hiring season, which might be playing into delayed or curtailed job creation”. The report also referenced the September NFP data, noting that self-employed workers in the gig economy lost 114,000 jobs that month. However, a new ADP report indicates structural demographic shifts are expected to reverse this short-term decline. Pending Home Sales for October rose 1.9% M/M, above the expected +0.5%, and the prior +0.1%; inventory/sales ratio was unchanged at 1.37 months’ worth. NE, S, and MW all saw gains M/M, with the latter surging 5.3%, while the W decreased 1.5%. As NAR Chief Economist Lawrence Yun writes, “Mid-West shined above other regions due to better affordability, while contract signings retreated in the more expensive West. Days on the market typically lengthen from Nov. through Feb., providing better negotiating power to buyers during the holiday season.” Yun adds, “Job gains in Sept., following the data blackout, are reassuring and suggest the economy is not slipping into a recession, which may boost confidence in future homebuying.” Elsewhere, Oil closed lower by 1.6% while Gold was flat.
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