The US stock market rallied across the board late at night

On December 2nd, local time, the three major US stock indices opened higher. After the opening, the Nasdaq index saw an initial increase of up to 1%, reaching a new high since November 12th. In the technology sector, stocks showed mixed performances, with Tesla rising by over 4%, Google by over 1%, while Microsoft fell by over 2%, and Meta and Nvidia fell by over 1%. Copper and cryptocurrency-related stocks saw the largest gains. The Aluminum Company of America rose by over 6%, Coinbase and Kaiser Aluminum rose by over 5%.

The news of the US stock market's all-round rally in the late night has a complex and multi-faceted impact on the financial sector. Firstly, it has an impact on global capital markets. As the "barometer" of global risky assets, the rise of the US stock market usually leads to an improvement in the global investor sentiment. The strong performance of technology stocks (such as Nvidia and Amazon rising by over 3%) may drive funds to shift from safe assets (such as gold and US bonds) to risky assets (such as emerging market stocks and cryptocurrencies), forming a global "buying momentum effect". If the US stock market rises accompanied by expectations of a Fed rate cut (such as a 89% probability of a rate cut in December), the US dollar may weaken, pushing non-US currencies to appreciate. If the expectation of a rate hike in the Japanese yen rises, the unwind of carry trade may lead to capital flowing back from the US stock market to Japanese yen assets, impacting high-valued technology stocks and intensifying market volatility. The expectation of rate cuts may lower US bond yields, but if Japanese institutions reduce US bonds and return to their home country, the 10-year US bond yield may be pushed up passively, forming a "rate cut + yield increase" contradiction. Moreover, the current US stock valuation already implies an excessive optimism about technological changes, with the dynamic price-earnings ratio of the S&P 500 reaching 28 times (historical 90% percentile). The valuation of technology stocks is particularly prominent. If the shipment growth of AI chips is lower than expected, the valuation of related stocks may decline by 30%. This bubble spreads through the derivatives market to the global level. If stock prices fluctuate significantly, it may trigger chain selling, leading to a global wealth reduction.

Secondly, it has an impact on capital and exchange rates. The surge of the US stock market may attract international capital to flow into emerging markets, increasing the liquidity of the A-share market. However, some investors who have invested in both the Shanghai and New York stock markets may withdraw A-share funds and invest in the US stock market, causing a capital outflow pressure on the A-share market. At the same time, the rise of the US stock market attracts global capital to concentrate in it. From January to October 2025, foreign capital net purchases of US stocks reached 230 billion US dollars, but the capital distribution is extremely uneven. India, Brazil, and other emerging markets saw a capital outflow of 7.4 billion US dollars during the same period. This differentiation leads to a "dual-track" capital circulation: the US uses the stock market to draw global savings (foreign holdings account for 31% of the S&P 500 market value), while emerging markets face "capital loss" and currency depreciation pressure. For example, the Indian rupee depreciated by 6.3% this year, and the yield of sovereign bonds in Indonesia rose by 80 basis points.

Thirdly, it has an impact on investors and market sentiment. The rise of the US stock market usually boosts global investor confidence, making investors more willing to take risks and increase stock investments. This may lead to an increase in buying pressure in the A-share market, forming an upward trend. The rise of the US stock market may amplify market volatility globally. On the one hand, the strong performance of the US stock market may attract funds to flow out from other markets, leading to increased volatility in other markets; on the other hand, the correction of the US stock market may trigger a global market chain reaction, leading to an increase in market volatility.

Fourthly, it has an impact on the Fed's policy. Although the Fed's rate cut alleviates short-term liquidity pressure, the uncertainty of policy转向 is accumulating risks. If inflation rebounds and forces the Fed to restart rate hikes， the 10-year US bond yield may rise to 4.5%， leading to an increase in corporate financing costs (investment-grade bond spreads widen by 100 basis points)， and the probability of sovereign debt default in emerging markets from the current 3.2% to 6.1%. The scale of US dollar debt in emerging markets has reached 3.8 trillion US dollars, and its structure is fragile, with huge short-term refinancing pressure.

In conclusion, the overall rise of US stocks in the evening, although it boosted market sentiment in the short term, the negative impacts it may bring could pose a long-term challenge to global financial stability. Eventually, it may trigger systemic risks across markets and regions, and we need to be vigilant about the potential spillover effects that could have a profound impact on the global economic and financial landscape.