Shutdown, Cuts, and Trade Truce

For the month as a whole, the US S&P 500 rose 2.30 percent in USD terms, the European Stoxx 600 ended up 2.5 percent in EUR terms, and the Nordic VINX rose 3.4 percent in NOK terms. Here at home, the Oslo Stock Exchange fell 2.0 percent (OSEBX).

Data drought during the “shutdown”

The US shutdown is entering its second month and is emptying the calendar of key indicators, with a particularly large hole in labor market statistics. When the timely indicators fail to appear, the range of interpretations widens, and pricing swings more around the few data points that are actually published. At the same time, the debate over data quality has intensified: the share of imputed inflation has risen markedly since the spring, while annual inflation remains in the upper part of the target band. This suggests that such periods primarily shift consumption—particularly among public-sector employees whose pay is delayed—rather than change trend growth, but the duration will be decisive once revisions return to a normal pace.

Fed cut with a hawkish undertone

The US Federal Reserve (FED) delivered another cut and put balance-sheet reduction on pause from December 1. At the same time, the committee signaled that further easing is not a given. One member wanted to keep rates unchanged, another wanted a double cut. The inflation target must be secured while the labor market cools. Long yields rose briefly, and the path of rates is being priced more cautiously. Monetary policy remains supportive but clearly data-dependent. Individual months of inflation and wage growth therefore carry greater weight.

US–China: Easing after the summit

The summit between Trump and Xi ended with confidence-building measures and postponements that reduce the risk of a rapid escalation. The result was lower tariff rates and milder export rules that provide greater predictability in goods flows and can move projects from “on hold” to “execution.” The framework remains fragile, and technology as well as rare earths remain sensitive areas. For markets, the most important thing is that the parties have bought themselves time, which helps reduce uncertainty going forward.

The road ahead

Global markets as measured by MSCI World rose 3.4% in local currency. It appears the “shutdown” is nearing a resolution, while the Fed continues with a less “hawkish” monetary policy. Tariffs and trade barriers still create uncertainty, but the US–China summit has reduced the level of conflict and provided more predictability in goods flows. Despite all this, strong corporate earnings continue, supporting equities as a solid option for long-term saving.