A year-end rally is still on every trader’s wishlist

U.S. markets may have had a rocky start in December, but there seems to be some steam in the trading engine for a turnaround from a tumultuous November.

Bitcoin recovered part of its recent slide and tech names rallied Tuesday stateside, giving stocks a recovery from a pullback in the previous session that snapped a five-day winning streak. The rebound suggested investor appetite to take on market risk hasn’t vanished; it just needed a moment to catch its breath.

Other indicators point to lingering confidence in a year-end rally.

Investors are pricing in an 89.2% chance of a quarter percentage point rate cut at the U.S. Federal Reserve’s upcoming meeting on Dec. 10, according to the CME FedWatch Tool. That expectation has climbed sharply from a month ago, when the odds were closer to a coin toss.

Barring any surprises, attention is shifting back to fundamentals. Markets appear to be “focusing instead on better-than-expected earnings projections for the fourth quarter and calendar year 2026, in addition to looking beyond the economic soft patch we’re currently experiencing to growth accelerating later next year,” said Doug Beath, global equity strategist at Wells Fargo Investment Institute.

If investors are hunting for a narrative to close out the year, they may have finally found one: Cautious optimism trying its best to outweigh the noise.

— CNBC’s Sean Conlon and Pia Singh contributed to this story.

Tech lifts U.S markets. All three key benchmarks closed higher Tuesday stateside, on the back of tech gains and a crypto recovery. The Europe Stoxx 600 ended just above the flatline. Shares of German biotech giant Bayer popped after the Trump administration curbed U.S. litigation related to its weedkiller product.

Digital Assets Treasury under scrutiny. DAT companies — publicly-listed entities that hold cryptocurrencies and provide investors with exposure to the underlying digital currency — are coming into focus as crypto markets plunged in recent weeks. As crypto prices fall, companies are trading at a discount to their crypto holdings, which can create a number of issues.

Tariffs’ delayed bite. President Donald Trump’s tariffs could prompt U.S. companies to reduce domestic headcount, according to statements from corporate executives and economic forecasters. The Institute for Supply Management’s November survey showed its employment gauge slipping 2 points to 44%, its lowest reading since August.

French AI startup releases new models. The release by Mistral, one of Europe’s leading AI startups, included a large model which it claims is the “world’s best open-weight multimodal and multilingual.” Mistral raised 1.7 billion euros in September, which saw participation from Nvidia and Dutch chip equipment maker ASML.

[PRO] Brace for crypto winter? Bitcoin’s recent price drawdown reached 20%, suggesting the crypto bull run has turned bearish. But whether a true bear market is here depends on several factors, analysts say.

Why China’s real estate market is still searching for a bottom

China’s housing market is flashing fresh warning signs as the property downturn enters its fifth year, with excess inventory dragging down home prices.

Sales by the top 100 developers plunged 36% in value in November from a year earlier, industry data showed.

Morgan Stanley estimated average sales of 25 major developers declined 42% year on year in November.

— Anniek Bao