Key Points

• Tech Valuations vs. Earnings: U.S. tech stocks now represent 31% of the S&P 500’s market value but contribute only 21% of earnings, highlighting valuation risks and dependence on continued AI-driven profit growth.
• Asia-Pacific Rally on Fed Cut Bets: Regional markets rose alongside Wall Street on growing expectations of a December Fed rate cut, with Japan, Korea and others gaining despite stock-specific turbulence.
• Australia’s Inflation Surprise: October CPI in Australia came in hotter than expected at 3.8%, led by housing and electricity costs, likely postponing any rate-cut conversations by the Reserve Bank of Australia.
• U.S. Housing Delistings Surge: Home sellers are pulling listings at the fastest pace in a decade as price cuts and weak demand weigh on the housing market, pointing to rate-sensitive fragility beneath headline numbers.

U.S. Tech’s Market Weight Outpaces Its Earnings Power

U.S. tech stocks now make up just over 31% of S&P 500 market value while contributing about 21% of index earnings, a widening gap that is heightening concern over stretched valuations. The Nasdaq trades at roughly 29x forward earnings, well above its 10-year average and the broader S&P 500, even as tech’s share of profits has slipped from 22.8% three quarters ago. Analysts note that recent strength, led by AI names, leaves the sector increasingly dependent on sustained, rapid earnings growth; any disappointment could trigger mid- to potentially double-digit declines given tech’s outsized index weight and role in passive portfolios.

Asia Equities Climb as Markets Price in December Fed Cut

Asia-Pacific stocks advanced in tandem with Wall Street as investors grew more confident the Federal Reserve will cut rates in December, with futures implying an odds above 80%. Japan’s Nikkei 225 jumped 1.85%, led by utilities, real estate and financials, while tech names such as SoftBank, Advantest and Renesas extended gains despite a sharp selloff in Kioxia on news of a Bain Capital stake sale. South Korea’s Kospi and Kosdaq rose more than 2%, and benchmarks in Australia, Hong Kong, China and India also moved higher, even as hotter Australian inflation data reminded markets that local price pressures remain a risk.

Australia’s Hotter Inflation Data Clouds Rate-Cut Outlook

Australia’s consumer inflation re-accelerated in October to 3.8% year on year, above the 3.6% expected and the fastest pace in seven months, reinforcing concerns that price pressures are proving sticky. Housing was the main driver, with costs up 5.9% amid record home prices, surging electricity bills and higher rents, while the trimmed mean rose to 3.3%. Although monthly headline CPI was flat, the data support the Reserve Bank of Australia’s cautious stance after holding rates at 3.6% and suggest that talk of further easing may be pushed into mid-to-late 2026, even as growth and business conditions remain solid.

U.S. Housing Market Sees Surge in Delistings as Sellers Balk at Weaker Prices

U.S. home sellers are pulling listings at the fastest pace in nearly a decade as soft demand and fading price momentum discourage deals, tightening effective supply even as inventory looks higher on paper. About 85,000 homes were delisted in September, up 28% year on year, with 70% of listings sitting on the market for 60 days or more and roughly 15% of would-be sales at risk of a loss, according to Redfin. While headline prices remain about 50% above levels five years ago, growing price cuts, seasonal slowdown and fragile buyer sentiment point to a more fragile, rate-sensitive housing market.

Conclusion

Wednesday signals point to markets finely balanced between optimism and vulnerability. U.S. tech’s growing weight in the S&P 500, despite a smaller share of earnings, leaves indices more exposed to any setback in the AI narrative. Asia-Pacific equities are riding hopes of a December Fed cut, but that rate-friendly backdrop is challenged by Australia’s upside inflation surprise, which underlines how sticky price pressures can be. In the U.S., a jump in home delistings reveals a more fragile housing market behind still-elevated price levels. Together, these trends argue for selective risk-taking and close attention to macro and earnings data.

Investment Insights

• Tech Concentration Risk: With U.S. tech now carrying a much larger share of index value than earnings, broad equity exposure is more vulnerable to an AI or growth disappointment. Diversifying beyond the “big growth” segment remains important.
• Rates Still Drive the Narrative: Asia’s rally on Fed cut hopes shows how sensitive global equities remain to U.S. policy expectations. Investors should watch incoming U.S. data as closely as local fundamentals.
• Inflation Is Uneven, Not Over: Australia’s upside CPI surprise is a reminder that disinflation is not a straight line. Policy paths can diverge by country, creating opportunities in relative bond and equity positioning.
• Housing as a Stress Indicator: Rising delistings in U.S. housing suggest buyers and sellers are struggling to agree on price. That points to a slower, more selective property market and argues against assuming housing will be a strong growth engine in the near term.

Economic Calendar

Date	Event	Why It Matters
November 25, 2025	U.S. Producer Price Index (PPI) – September (delayed release)	First look at U.S. pipeline inflation since the shutdown; an upside surprise could challenge expectations for a smoother disinflation path and a December Fed cut.
November 26, 2025	U.S. Q3 GDP (second estimate), Personal Income & Spending and Core PCE	A dense U.S. data cluster that tests the “soft landing” narrative, combining growth momentum with the Fed’s preferred inflation gauge and household demand indicators.
November 26, 2025	U.K. Autumn Budget 2025	Key signal on U.K. fiscal stance, with implications for gilts, sterling and U.K. growth prospects as investors weigh tax, spending and borrowing paths into 2026.
November 28, 2025	Japan Unemployment Rate & Tokyo CPI (November)	Fresh read on Japan’s labour market and leading inflation gauge that could shape expectations for further Bank of Japan policy normalization and yen volatility.
November 28, 2025	Canada Q3 GDP	Benchmark update on Canadian growth that will inform Bank of Canada policy expectations and North American demand assumptions for energy and cyclicals.