Weekly Capital Markets Watch

US stocks moved higher in a holiday-shortened week, with the S&P 500 Index and the Dow Jones Industrial Average both reaching record highs. Trading activity was light, but positive economic data and ongoing excitement around artificial intelligence supported investor confidence. The U.S. economy grew at a strong 4.3% annualized pace in the third quarter—the fastest in two years—mainly driven by healthy consumer spending. However, not all data were strong: orders for long-lasting manufactured goods fell in October, reflecting softer demand in transportation-related items. Consumer confidence declined for a fifth straight month, as households grew more cautious about jobs and income prospects, even though weekly jobless claims remained relatively low.

Bond markets were calm. US Treasury yields stayed in a narrow range and ended slightly lower, meaning bond prices edged up. Investors appeared encouraged by strong economic growth but also attentive to signs of cooling in consumer sentiment and business activity. Corporate bonds performed well, including riskier high yield debt, as optimism around growth supported demand.

European stocks finished modestly higher. The STOXX Europe 600 Index rose slightly and stayed close to record levels, although performance across major countries was mixed, reflecting cautious optimism about the economic outlook for next year.