CME outage, sector rotation, and Black Friday: what to watch

Introduction#

U.S. markets head into Black Friday with a constructive finish from the prior session and a disruptive twist overnight. According to Monexa AI, the S&P 500 (^SPX) closed at 6,812.61 on Thursday, up +0.69%, the Dow Jones Industrial Average (^DJI) at 47,427.12 (+0.67%), and the Nasdaq Composite (^IXIC) at 23,214.69 (+0.82%), while the CBOE Volatility Index (^VIX) ticked up to 17.46 (+1.45%). The bid broadened beyond mega‑cap technology into cyclicals, commodities, and defensives. Overnight, the dominant story is an exchange‑infrastructure breakdown: CME Group halted futures trading across FX, commodities, Treasuries, and equity contracts due to a data‑center cooling issue, disrupting benchmark price discovery ahead of the U.S. open, per Reuters.

This comes as Europe posted mixed retail and inflation signals and as the U.S.–China technology rivalry sharpened further. Reuters reported fresh constraints on access to U.S. AI chips in China, with workarounds pushing some model training offshore, a development that continues to shape positioning in leaders such as NVDA and ecosystem suppliers. See Reuters coverage on Chinese regulators restricting Nvidia chip deployments and firms training offshore, and a related overview from Bloomberg on China’s scale ambitions for AI compute.

Market Overview#

Yesterday’s Close Recap#

The prior session’s finish reflected cautious risk‑on tone with breadth tilting toward cyclicals and value. According to Monexa AI, indices closed as follows:

The combination of higher equity indices alongside a modest uptick in ^VIX and a sharper drop in the Russell 2000 volatility (^RVX) suggests risk appetite improved more distinctly in small‑cap space while headline index hedging costs edged up. Sector internals (Monexa AI heatmap) showed mixed technology breadth—semiconductor and hardware‑adjacent names firmed while select software lagged—against robust moves in energy, materials, utilities, and staples.

Overnight Developments#

The key macro‑market development is the CME trading halt across FX, commodities, Treasuries, and equities futures tied to a cooling issue at an external data center, with interruptions persisting for hours, per Reuters. The disruption affects price transparency into the U.S. open and may temporarily mute liquidity in contracts linked to WTI crude, gold, U.S. Treasuries, and the S&P 500.

In Europe, German retail sales fell -0.3% m/m in October while French inflation held steady in November and Spain’s retail sales grew +3.8% y/y. An ECB consumer survey indicated near‑term inflation expectations ticked slightly higher while medium‑term remained anchored around target, supporting a wait‑and‑see stance from policymakers. With U.S. markets coming off Thanksgiving and a shortened session ahead, the global tone remains steady but headline‑sensitive.

Corporate headlines also broke overnight. Alphabet’s GOOGL dropped an EU antitrust complaint about Microsoft’s cloud practices just a week after a fresh EU probe into the sector, per Reuters. Separately, AAPL notified the European Commission that Apple Ads and Apple Maps meet Digital Markets Act thresholds, according to Reuters. Meanwhile, Amazon AMZN faced Black Friday worker strikes at German warehouses, as reported by Reuters.

Macro Analysis#

Economic Indicators to Watch#

Today’s U.S. economic calendar is limited by the holiday‑shortened session, and no major domestic releases were flagged in the provided materials. That leaves the early tape especially sensitive to the restoration of U.S. futures pricing following the CME outage and to discretionary headlines tied to Black Friday retail activity. In Europe, steady French inflation and the ECB’s stable medium‑term expectations backdrop imply no imminent policy shift, aligning with the mixed retail print from Germany and strength in Spain.

Given the cross‑currents, early equity flows may lean on micro drivers and sector rotation rather than macro catalysts. The main macro variable for the morning is market functioning itself—clarity on CME’s return to normal operations will likely shape opening liquidity and cross‑asset correlations.

Global and Geopolitical Factors#

The U.S.–China technology rivalry continues to influence capital allocation across semiconductors, networking, and power infrastructure. Reuters detailed fresh constraints within China on deploying U.S. AI chips and noted a trend of offshore model training to access U.S. compute, intensifying supply‑chain bifurcation and potentially accelerating local substitution. See coverage on Chinese regulators blocking new deployments of Nvidia GPUs and firms training overseas, and Bloomberg’s overview of China’s planned scale for AI data centers: Reuters, Reuters, Bloomberg.

A separate geopolitical marker comes from telecoms: Reuters reported Huawei and ZTE have secured 5G contracts in Vietnam as ties with China warm, highlighting shifting competitive landscapes across Southeast Asia and potential long‑run implications for Western vendors’ addressable markets.

Sector Analysis#

Sector Performance Table#

According to Monexa AI, sector performance at yesterday’s close was as follows:

There is a minor discrepancy between this sector summary and elements of Monexa AI’s heatmap internals—for example, Consumer Defensive outperformance appears between +1.09% and +1.31% across the two datasets and Energy ranges from roughly +1.19% to +1.77%. Differences likely reflect constituent granularity and timing. We rely on the sector table above for index‑level performance and use the heatmap to parse intraday and single‑name dispersion.

Technology finished modestly higher but split beneath the surface. Monexa AI’s heatmap shows software gave back ground on idiosyncratic pressure while semis and hardware rallied. WDAY fell -7.85%, a notable outlier, even as TER rose +6.98%, ORCL gained +4.02%, AVGO advanced +3.26%, AMD added +3.93%, and MSFT climbed +1.78%. The pattern underscores a preference for compute infrastructure and select large‑cap platforms while investors reassess high‑multiple enterprise software exposures.

Communication Services posted a small net gain with dispersion. WBD rose +4.01%, TKO gained +3.17%, and NFLX added +1.67%, while ad‑supported mega‑caps like GOOGL and META were fractionally softer. In Financials, the tape pointed risk‑on: HOOD jumped +10.93% and COIN rose +4.27%, complementing steadier gains in core banks such as JPM (+1.53%) and brokers like IBKR (+1.61%). BRK-B added +0.52%.

Consumer‑facing sectors bifurcated. Consumer Defensive outperformed with discount and warehouse leaders—DG (+4.28%), DLTR (+3.87%), TGT (+3.72%), WMT (+1.97%), and COST (+1.56%)—while Consumer Cyclical was mixed, with TPR (+2.80%), ULTA (+2.71%), LULU (+2.50%), CMG (+1.88%), and TSLA (+1.71%) balancing softness in ABNB (-1.54%).

Healthcare edged down. Weakness in big pharma and med‑tech names like ABBV (-1.79%) and IDXX (-1.40%) offset insurer strength from HUM (+3.41%), CVS (+1.77%), and UNH (+1.05%). Industrials were broadly constructive, but DE dropped -5.67%; airlines and aerospace rallied, including DAL (+3.41%), UAL (+2.71%), BA (+2.46%), and CAT (+1.26%).

Energy and Materials advanced together. Renewables and upstream both participated with FSLR up +4.55%, EQT +3.95%, APA +2.45%, CTRA +2.13%, and XOM +0.23%. Materials saw outsized moves in miners and chemicals, including NEM (+4.93%), DOW (+3.04%), LYB (+2.99%), FCX (+2.64%), and NUE (+1.84%). Utilities were a notable outperformer with VST (+3.49%), GEV (+2.99%), NRG (+2.89%), CEG (+2.13%), and PCG (+1.78%). Real Estate was positive but muted, with PLD (+0.60%), AMT (+0.82%), DLR (+0.98%), and WELL (+0.81%) offsetting weakness in CSGP (-1.99%).

Company‑Specific Insights#

Earnings and Key Movers#

Single‑name dispersion was meaningful into the holiday. According to Monexa AI’s heatmap, WDAY fell -7.85% on idiosyncratic pressure, while compute and networking proxies such as AVGO, AMD, and TER rallied, and platform leaders like MSFT held the tape together. In Industrials, DE slid -5.67%, contrasting with broad strength in airlines and aerospace.

Overnight corporate developments could steer the open. GOOGL withdrew its EU antitrust complaint against Microsoft Cloud amid a parallel EU probe, per Reuters, potentially lowering near‑term headline risk in hyperscale cloud rivalry while shifting focus back to product and pricing dynamics. AAPL informed Brussels that Apple Ads and Maps meet Digital Markets Act thresholds, according to Reuters, underscoring the regulatory perimeter Apple must navigate in Europe.

Retail headlines matter into Black Friday. AMZN faced strikes at German warehouses, per Reuters, and separately has been expanding financial services offerings in India, according to Monexa AI’s news feed, signaling incremental competition with local banks and a push for embedded finance. Within media, Monexa AI highlights chatter around potential corporate maneuvering involving WBD, though investors should await verifiable filings for direction.

In exchanges and market plumbing, CME became the story after halting trading across key futures contracts, per Reuters. The near‑term questions for investors are service restoration timing, redundancy upgrades, and any regulatory follow‑up—areas that influence volumes, client confidence, and capital intensity across exchange operators.

Crypto‑linked equities may see conflicting forces at the open. According to Monexa AI’s FMP feed, November saw record outflows from U.S. spot Bitcoin ETFs and a technical “death cross” warning in Bitcoin. That backdrop contrasts with prior‑session gains in HOOD and COIN, leaving positioning sensitive to fresh flows data.

Select international tech supply‑chain names also feature in the morning narrative. LG Display LPL continues to pivot toward OLED, with OLED now representing about 65% of sales and Q3 revenue up +25% q/q, per company disclosures captured in Monexa AI’s research feed. The strategic re‑mix supports the broader theme of hardware vendors moving up the margin curve as legacy products are de‑emphasized.

Extended Analysis: Global Overnight Shifts And How They May Drive Today’s Open#

The CME outage is the most immediate market‑function risk. Reuters reported a cooling fault at an external data center that interrupted pricing across currencies, commodities, Treasuries, and equity futures. Even if resolved ahead of the bell, the gap in overnight price discovery can translate into wider early spreads, transient dislocations between cash and futures, and higher opening‑auction volatility. Historical derivatives volumes in the tens of millions of contracts per day frame the scale of sensitivity when a key hub is offline; the takeaway for investors is to expect an opening tape more reliant on cash equities and less on futures for signaling.

Beyond plumbing, the sector rotation evident in Thursday’s close reinforces a developing preference for real‑economy and yield‑sensitive exposures. Energy and materials strength, paired with a bid in utilities and discount retail, signals that investors are rediscovering value in cash‑flow certainty and commodity‑linked cyclicality. Within technology, leadership continues to consolidate around compute, networking, and the handful of platforms monetizing AI at scale, while software with elevated expectations is proving more fragile to stock‑specific news.

The geopolitical arc remains centered on AI. Reuters and Bloomberg coverage point to stricter limits on U.S. chip access inside China and the expansion of domestic power and data‑center capacity—an underappreciated constraint on AI adoption. For portfolio construction, that implies two things this morning. First, leaders with diversified revenue mix and less China exposure may find their multiples more defensible. Second, secondary beneficiaries in the AI stack—power infrastructure, thermal management, networking silicon, and memory—could continue to attract flows on days when headline AI chip leaders pause.

Finally, consumer behavior is poised to dominate the narrative into the weekend. Monexa AI’s heatmap shows pronounced strength in discount retail and warehouse clubs, consistent with a value‑oriented consumer. While up‑to‑the‑minute transaction data is not included in the provided materials, the market’s vote yesterday favored retailers with scale advantages, sharp price perception, and membership economics. The signal from the tape is clear: even as macro anxiety fades, investors prefer business models that can compound through varied demand environments.

Conclusion#

Morning Recap And Outlook#

With futures price discovery impaired overnight by the CME outage, the U.S. open will likely key off cash‑equity liquidity, sector leadership from energy, materials, utilities, and staples, and micro headlines in technology and retail. According to Monexa AI, the prior session’s close delivered a cautiously bullish tone with broad participation outside a handful of idiosyncratic laggards. Overnight, Reuters headlines around market plumbing, EU tech regulation angles involving GOOGL and AAPL, and labor actions at AMZN frame the first hour’s risk.

Into the bell, the practical checklist is straightforward. First, watch for confirmation that CME’s systems have fully stabilized; partial functionality can still distort early cross‑asset reads. Second, monitor whether yesterday’s rotation into cyclicals and value persists, particularly in energy, materials, and utilities. Third, in technology, favor the leaders of compute intensity and network effects while demanding clear catalysts before embracing software names that sold off on stock‑specific news. Lastly, keep an eye on retail headlines around Black Friday execution, especially for scale operators whose value proposition has resonated in recent sessions.

Key Takeaways#

Thursday’s close set a constructive tone, with the S&P 500, Dow, and Nasdaq all higher and leadership rotating toward energy, materials, utilities, and staples. Overnight, a CME outage disrupted futures trading across multiple asset classes, making the quality of early price discovery a decisive variable for the open. In Europe, mixed retail data and steady inflation dynamics support a steady‑policy backdrop, while U.S.–China technology tensions continue to shape investment in AI hardware and infrastructure. Company‑specific developments—from GOOGL and AAPL regulatory positioning in Europe to AMZN labor actions and CME operational resilience—are likely to steer stock‑level dispersion at the open. For positioning, the tape favors selective cyclicals and value, compute‑centric technology, and durable cash‑flow franchises, with a premium on liquidity as markets navigate the immediate aftermath of an overnight infrastructure shock.