Zhitong Finance APP learned that CITIC Securities released a research report saying that the overall U.S. stock market will fluctuate slightly until the Federal Reserve interest rate meeting on December 10-11, and funds will shift from technology to defensive medical utilities. Afterwards, Trump is expected to nominate a new candidate for the chairman of the Federal Reserve, and trading expectations for monetary policy are expected to become looser. Therefore, U.S. stocks may begin to rebound in the second half of December. Resident tax cuts will also begin on January 1 next year. Fundamentals will also provide certain support for employment and consumption. At the industry level, it is recommended to pay attention to: 1) the technology industry in the U.S. stock market, where valuations and performance are more consistent; 2) manufacturing, mid-to-upstream resource products, and energy infrastructure (especially nuclear power) that benefit from the reindustrialization process and favorable policies; 3) the military industry with increased fiscal spending; 4) Internet diagnostics that are benefiting from cuts in medical expenditures; 5) the financial industry (especially banks) during the interest rate cut cycle.
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On November 20, U.S. stocks opened higher and moved lower as a whole, especially technology stocks, which suffered significant declines. The Nasdaq 100 and Philadelphia Semiconductor Index fell 2.4% and 4.8% respectively. In particular, some technology stocks (more than 50%) that have experienced significant gains since the beginning of the year, including Micron, AMD, Lam Research, Palantir, etc., have all fallen by more than 5%. However, after Nvidia disclosed its better-than-expected third-quarter report and future guidance, CITIC Securities judged that the overnight decline was more driven by profit-taking driven by macro factors, rather than actual panic selling by investors regarding the bursting of the AI bubble.
After the release of new U.S. non-farm payrolls data in September, hawkish comments from Federal Reserve officials heightened expectations for monetary tightening.
Released on November 20, the number of new non-farm jobs in the United States in September was 119,000, exceeding market expectations of 51,000. The new non-agricultural data exceeded expectations, coupled with recent hawkish remarks by many Federal Reserve officials, further boosting market expectations for tightening monetary policy. According to reports from Bloomberg and Reuters, Federal Reserve Board Governor Michael Barr said that since the current inflation level is still hovering around 3%, which is still far from the 2% target, interest rate cutting decisions need to be more prudent; Cleveland Fed President Beth Hammack reiterated his stance against further interest rate cuts; even Chicago Fed President Austan Goolsbee, who had previously been relatively neutral, expressed uneasiness about further cutting interest rates in December. The hawkish statements of Federal Reserve officials have jointly promoted the market's expectations for re-pricing the path of monetary policy. That is, the Federal Reserve will be more inclined to maintain the current interest rate level rather than cut interest rates at the December interest rate meeting. Even before inflation shows a clear downward trend, it may maintain the current interest rate level for a long time.
However, the marginal weakening trend of the U.S. job market has not changed, and the market's "hawkish panic" trade in monetary policy may be nearing its peak.
Judging from labor market data, the U3 unemployment rate rose from 4.3% in August to 4.4% in September, while the U6 unemployment rate, which reflects broad unemployment and marginal labor conditions, fell from 8.1% to 8.0%, while the labor force participation rate rebounded to 62.4%. The coexistence of new jobs, rising participation rates and rising unemployment rates indicates that improvements in labor supply and job replacement may occur at the same time. However, the higher-than-expected non-farm employment data does not mean that the U.S. labor market is once again fully prosperous. Considering that the total number of non-farm employment in July and August this year was revised down by 33,000, continuing the downward revision trend this year, the possibility of further downward revision of non-farm employment data from August to September cannot be ruled out in the future. Therefore, the substantial weakening of the U.S. job market may have been masked by the hawkish statements of Federal Reserve officials.
Looking forward to the market outlook, CITIC Securities predicts that the December Fed interest rate meeting may be the peak of this round of "hawkish panic", and then the main line of market trading may turn to Trump's nomination game for the new Fed chairman; by then, unless a relatively hawkish candidate like Kevin Warsh who does not support QE is nominated, the market is expected to return to the logic of trading loose monetary policy after the dust settles on the new Fed chairman.
The extreme narrative of the “AI bubble” bursting may be difficult to see in the short term.
On the demand side, the diversified competitive landscape of China and the United States promotes model iteration and full-stack innovation. According to Google’s performance meeting, Google The monthly Token processing volume soared from 9.7 trillion in April 2024 to 1300 trillion in October 2025. Under the neutral assumption, it is expected that global monthly Token consumption will still increase by 3 times by the end of 2026 compared with the current level, 203 In 2000, with the popularization of multi-modal and AI agents, the capacity may be expanded by 20 times, while supply-side chip and system performance upgrades continue to reduce unit computing power costs, providing support for demand release, and there are still bottlenecks in many links of the supply chain, and concerns about overcapacity are not yet established. At the commercialization level, there is currently a disconnect between token consumption and commercial returns. However, the three major scenarios of advertising placement, Agent Commerce, and enterprise-level solutions are gradually implemented, promoting the transformation of the industry from "scale growth" to "value growth". It is expected that the commercialization breakthrough of SaaS manufacturers in the short and medium term will become the key.
On the financial side, according to various company performance exchange meetings, the CAPEX of the world's four major technology giants in 2025Q3 totaled +74% year-on-year, and they have revised their guidance upwards. Strong cash flow and policy and tax incentives provide financial support. In terms of risks, CITIC Securities believes that the AI search penetration rate is about to hit the ceiling. Subsequent token growth depends on C-side scenarios and Agent implementation. Debt financing risks are concentrated in small and medium-sized cloud service providers. Ecological cooperation between OpenAI and NVIDIA is difficult to falsify in the short term. Overall, it does not constitute an inducement for the industry bubble to burst.
U.S. stock performance expectations continue to be revised upward, and valuations have narrowed.
Since the end of October, U.S. stock performance expectations have continued to be revised upwards, with the upward revisions concentrated in information technology and health care. At the same time, price retracements in the index and multiple sectors combined with profit increases have caused dynamic valuations to narrow to a large extent. According to LSEG data, as of November 21, the SPX500's 2025/2026 revenue growth expectations were revised upwards by 0.1pcts/0.4pcts respectively compared with the end of October, and the profit growth expectations were revised upwards by 0.03pcts/1.0pcts respectively. However, during the same period, the S&P 500/Nasdaq 100 fell 4.2%/6.5% respectively, resulting in a rapid decline in both PE/PEG of US stocks.
From a structural point of view, the upward revision of revenue growth expectations in 2025 is mainly concentrated in the information technology and financial sectors, with an upward revision of 0.4pcts/0.4pcts respectively; the upward revision of profit growth expectations is mainly concentrated in the real estate, information technology and energy sectors, with an upward revision of 0.7pcts/0.5pcts/0 respectively. .5pcts; the upward revision of revenue growth expectations in 2026 is mainly concentrated in the medical care and communication services sectors, with an upward revision of 1.7pcts/0.8pcts respectively; the upward revision of profit growth expectations is mainly concentrated in the medical care and daily consumption sectors, with an upward revision of 3.6pcts/2.2pcts respectively. During the same period, information technology/non-core consumption/industrial decline and valuation (PE TTM) fell the most. CITIC Securities believes that the recent retracement of U.S. stocks, especially technology stocks, is mainly driven by the contraction of valuation multiples rather than the deterioration of profit expectations.
U.S. stock market outlook: After the Federal Reserve’s interest rate meeting in December, U.S. stocks are expected to resume their upward trend.
In the short term, the trading participation of U.S. institutional investors is expected to gradually decline after Thanksgiving on November 27 this year, which may correspond to an increase in retail trading. As for expectations for monetary policy, there may not be any important new economic data disclosed before the Federal Reserve's interest rate meeting in December. The CPI data originally planned to be disclosed by the U.S. Bureau of Labor on December 10 will be postponed to December 18. The U.S. Department of Commerce also said that the PCE price index originally planned to be disclosed on November 26 will also be "disclosed at another date." The third-quarter reports of U.S. heavyweights were also expected to be disclosed previously.
Therefore, CITIC Securities predicts that the overall U.S. stock market will fluctuate slightly until the Federal Reserve interest rate meeting on December 10-11, with funds diverted from technology to defensive medical utilities. Afterwards, Trump is expected to nominate a new candidate for the chairman of the Federal Reserve, and trading expectations for monetary policy are expected to become looser. Therefore, U.S. stocks may begin to rebound in the second half of December. Resident tax cuts will also begin on January 1 next year. Fundamentals will also provide certain support for employment and consumption.
At the industry level, CITIC Securities recommends focusing on: 1) the technology industry in the U.S. stock market, where valuations are more consistent with performance; 2) manufacturing, mid-to-upstream resource products, and energy infrastructure (especially nuclear power) that benefit from the reindustrialization process and favorable policies; 3) military industry with increased fiscal spending; 4) Internet diagnostics that benefit from cuts in medical expenditures; 5) the financial industry (especially banks) during the interest rate cut cycle.
