The US dollar reverses and rises, cryptocurrencies collectively advance, gold and oil surge together, geopolitical risks boost the demand for commodities as safe-haven assets.

Yesterday, the market staged a classic “risk aversion” driven rally. Bitcoin broke through $96.82K, with a 24-hour increase of 1.90%; Ethereum also steadily rose to $3.36K, up 1.86%. Along with cryptocurrencies, precious metals and energy commodities also moved higher, reflecting market concerns over escalating geopolitical risks.

Commodities Surge, the Story Behind the Dollar Crash Against the Colombian Peso

The US Dollar Index rose sharply yesterday but then retreated, ending a three-day rally at 98.35, down 0.08%. The seemingly calm dollar movement masked strong performance in the commodities market.

Gold surged 2.66% to $4446.7 per ounce, silver jumped 5.1%, and London Metal Exchange (LME) copper hit a new high of $13053 per ton, breaking the $13,000 per ton mark. Most notably, WTI crude oil, after hitting a bottom, rebounded quickly, reclaiming the $58 mark, closing at $58.35 per barrel, up 1.78%.

This risk-averse rally affected markets worldwide. The dollar against the Colombian peso opened nearly 2% lower, and Colombian dollar bonds traded down across the board, becoming the worst-performing emerging market asset. Escalating geopolitical tensions directly suppressed risk assets and increased the appeal of safe-haven assets.

US Stock Market’s Three Major Indices All Rise, AI Remains the Strongest Driver

Despite rising risk aversion, the three major US stock indices still moved higher against the trend. Dow rose 1.23%, S&P 500 gained 0.64%, Nasdaq increased 0.69%, and China’s Golden Dragon Index rebounded 0.49%. Behind this resilience, AI remains the dominant force.

Tech stocks continued to lead the rally. Tesla rose 3.1%, Amazon climbed 2.9%, and a major AI chip manufacturer briefly gained 2.5% but ultimately closed down 0.4%. The energy sector also performed strongly, with ExxonMobil and ConocoPhillips both rising over 2%, and Chevron soaring 5.1%, making it the best performer among Dow components.

European markets also kept pace. Germany’s DAX 30 index rose 1.34%, UK’s FTSE 100 gained 0.54%, and France’s CAC 40 increased 0.2%. Semiconductor concepts remain hot, with a European chip equipment company’s US ADR soaring 5.5%.

Fed Signals “Neutral,” Rates Near Bottom

The market’s primary concern remains the Federal Reserve’s policy outlook. Minneapolis Fed President Kashkari stated that the Fed’s current interest rate may have already approached a neutral level for the US economy, and future adjustments will depend on new data.

Kashkari emphasized that the economy has shown “remarkable resilience” over the past few years, exceeding expectations, indicating that monetary policy pressures are not as severe as anticipated. His judgment is that the Fed is quite close to a neutral stance.

Supporting this statement are two conflicting data sets: on one hand, the unemployment rate rose to 4.6% in November (the highest since 2021), and consumer price increases were below expectations; on the other hand, economic growth in Q3 hit a two-year high, raising concerns about a potential reignition of inflation. The Fed needs more data to determine which factor has a greater influence.

Tariff Threats Escalate, Manufacturing Data Deeply Contract

Beyond geopolitical tensions, trade friction is also heating up. The ISM US Manufacturing Index stood at 47.9, for the 10th consecutive month below the 50 expansion/contraction line, indicating manufacturing contraction, the largest decline since December last year. The new orders sub-index has contracted for four consecutive months, and export orders remain weak; the employment sub-index was 44.9, declining for the 11th straight month.

Trump’s tariff policies continue to ferment. Threats against India have attracted market attention—if India does not meet the requirements to limit Russian oil purchases, the US may raise tariffs. Some of India’s export goods already face US tariffs as high as 50%. This trade pressure is spreading globally and is a significant driver of manufacturing recession.

Debt Risk Alert Rings, Fiscal Pressure Threatens Economic Stability

Former US Treasury Secretary Yellen issued a warning at the Economics Society annual meeting: “Fiscal dominance” poses an increasing threat to the US economy. The primary long-term issue is the continuous growth of debt, which could force the Fed to keep interest rates low to reduce government debt servicing costs rather than prioritize controlling inflation.

Yellen emphasized that if the Fed is forced to ease government debt burdens through low interest rates, the US could face serious governance risks. This risk is intensifying, and she called for close monitoring.

Humanoid Robots Take Off, AI Chip Architecture Competition Heats Up

Global tech giants are competing for the new track of robotics. Supported by OpenAI investments, 1X Technologies launched the household humanoid robot “Neo,” priced at $20,000, with plans to start deliveries in the US this year. Neo is about 168 cm tall, weighs around 30 kg, equipped with two highly articulated arms (22 degrees of freedom each), capable of tasks like folding clothes, picking up objects, and cleaning, with a single charge lasting 4 hours.

Chip manufacturers are also moving fast. Qualcomm announced a new robotics architecture and the Dragonwing IQ10 series processors, entering the industrial and humanoid robot markets, aiming to leverage its 40 years of mobile chip experience to compete in the next-generation robotics market. Meanwhile, a leading AI chip company has also launched new AI tools and models suitable for autonomous vehicles and robots, accelerating autonomous driving development.

Key Data Highlights for Today

Upcoming macro data: France December CPI preliminary, Germany December CPI preliminary, US December S&P Global Services PMI final, US weekly API crude oil inventories as of January 2, will be released sequentially.

Fed movements: Bostic will speak, and markets will continue to watch for the latest statements from Fed officials on economic outlook and policy stance.

Market close overview:

• US 10-year benchmark Treasury yield around 4.15%, down 4 basis points from the previous trading day
• Hang Seng Index night futures close at 26,562 points, up 188 points
• H-Share Index night futures close at 9,214 points, 66 points above yesterday’s close

The crypto market remains the most dynamic investment asset class. The steady rise of Bitcoin and Ethereum reflects ongoing market optimism for long-term risk assets, despite short-term volatility caused by geopolitical and trade frictions. Investors should closely monitor Fed policy developments, tariff progress, and corporate earnings data, as these factors will determine the market’s future direction.