The financial markets on December 4th showcased a vibrant uptick, as the major indices on Wall Street experienced a significant boost. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq all rose together, marking a noteworthy achievement for investors. The Dow, in a remarkable feat, not only climbed by 0.69% but also crossed the psychologically important threshold of 45,000 points for the first time in history, signaling robust investor confidence and economic resilience. The Nasdaq Composite experienced an even stronger rally, with a 1.30% increase, and the S&P 500 added 0.61%, all contributing to a historic closing for these benchmark indices.

Among the technology giants, notable performer NVIDIA saw its shares increase by nearly 3.5%, while Amazon followed closely with a jump of over 2.2%. Apple, despite a more modest gain of 0.15%, continued to solidify its dominant position in the market, and Meta, previously Facebook, barely moved the needle with a 0.02% increase. Apple's recent stock performance is particularly impressive as it has consecutively hit record closing highs for four trading days, pushing its market capitalization beyond $3.67 trillion, ensuring its place as the largest company globally by market value. Analysts project that Apple could reach a staggering market value of $4 trillion by the year 2025, a figure that underscores the tech titan's growth trajectory.

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In an interesting maneuver within the tech landscape, Apple has begun leveraging Amazon's substantial resources in the artificial intelligence domain. The company announced its collaboration with Amazon's Web Services (AWS), utilizing custom AI chips that AWS provides to enhance its search functionality and other services. Additionally, Apple is evaluating the latest AI chips from Amazon to see if they can be suitable for pre-training applications in its various models, including those related to Apple Intelligence.

In a twist that impacted the cryptocurrency markets, Paul Atkins, a proponent of digital assets and a seasoned figure in financial regulation, was appointed as the chairman of the U.S. Securities and Exchange Commission (SEC). This heightened interest in digital currencies saw Bitcoin soar, reaching an impressive intra-day high of $99,000. The cryptocurrency sector received a significant boost, with Bitcoin-related stocks witnessing a surge; Bit Digital's stock rose over 13%, MicroStrategy climbed near 9%, and Canaan Inc. increased by nearly 8%. Additionally, major players like Riot Platforms and Coinbase saw their shares rise by nearly 7% as investor enthusiasm in the crypto world surged.

The Nasdaq China Golden Dragon Index, however, experienced a contrasting phenomenon, closing down 1.38% as many popular Chinese stocks fell out of favor with investors. Shares of Gaotu fell by more than 10%, while companies such as JD.com and TAL Education dipped over 3%. On the flip side, some firms like NetEase managed to gain ground, with a 1.6% increase, and XPeng Motors showed resilience with a 0.79% rise.

Adding to the economic narrative, Federal Reserve Chairman Jerome Powell addressed the public's concerns regarding the Federal Reserve's control over monetary policy, dispelling any rumors about potential shifts in decision-making authority. During his remarks, he emphasized that the economy remains robust enough to allow for a cautious approach to potential interest rate cuts. Powell noted improvements in the labor market and an overall reduction in potential downsides, leading to stronger-than-expected economic growth.

"The labor market is showing signs of improvement, and the risks associated with it seem to be diminishing. Economic growth is definitely stronger than we had anticipated, and inflation is slightly elevated," Powell commented, hinting at more room for the Fed to operate without the urgency of deep monetary easing.

While Powell did not reveal specific intentions regarding recent interest rate trends, he asserted the Fed's capability to employ caution in its future decisions. He reiterated that the Fed could afford to be patient while navigating potential changes to interest rates.

The upcoming monetary policy meeting will see the Fed outlining its next moves in just two weeks. The market anticipates there is a 75% chance that the Federal Open Market Committee (FOMC) will decrease the benchmark borrowing rate by 25 basis points. Expectations are that they might skip a rate cut in January but could introduce several reductions throughout the remainder of 2025.

Powell expressed confidence that many would support the Fed's decision-making independence. He highlighted the significance of community backing in maintaining the Fed's path: "I believe there is widespread agreement that these ideas are essential. This is local law, and I have no concern that we are at risk," he stated.

Further contributing to the economic dialogue, the Federal Reserve released its latest Beige Book report on the same date, noting a slight uptick in economic activities across the United States after several months of stagnation. Though the growth was deemed modest, it suggested a general upward trend in expectations across most regions. Businesses exhibited a notable optimism regarding future demand, and consumer spending appeared stable overall, with employment levels remaining flat or barely increasing.

Interestingly, the Beige Book painted a less favorable picture of the economy compared to official statistics, indicating stagnation in growth, a decline in hiring rates, and slight price increases overall. In many cases, this runs counter to economic data showing that consumer spending remains strong and the unemployment rate sits at relatively low levels.

The Beige Book also emphasized that inflation rose only modestly, suggesting that rising consumer price sensitivity limited businesses' ability to pass costs onto consumers. Furthermore, while inflation remained generally moderate, various contacts reported that anticipated new tariffs under the incoming presidential administration could pose upward price risks in the future.

As a result of recent economic conditions, the probability of the Federal Reserve maintaining its current rates through December stood at around 22.5%, with a 77.5% chance of a cumulative rate cut of 25 basis points. Looking into January, the chance of rates remaining unchanged dipped to 17.2% while the probabilities for cumulative cuts of 25 basis points were estimated at 64.5%, and those for 50 basis points at 18.2%.