US credit markets are showing signs of caution as risk premiums on corporate bonds and junk bonds near recent highs, driven by concerns over the sustainability of artificial intelligence growth and broader economic issues. Investors have withdrawn significant bond orders after final pricing, and some bond sales have been pulled, reflecting a more cautious approach.

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Investors are anticipating Nvidia's earnings report and a delayed jobs report, which are expected to provide crucial insights into the economy and the sustainability of the artificial intelligence boom. The market has recently experienced volatility, with the S&P 500 and Nasdaq dipping below their 50-day moving averages. Investors are particularly interested in Nvidia's demand for AI chips and the impact of US trade policies on its business.

HSBC CEO Georges Elhedery said the bank is preparing for a "fragmented world" in which certain assets, such as advanced semiconductors, data, and cloud capabilities, are now classified as national-security sensitive and will increasingly be regulated by national boundaries. The shift, he said, reflects a broader realignment. While global business and trade will continue, they will be conducted increasingly within regional trade boundaries and under the purview of more strategic, national-level controls.

China's benchmark 10-year government bond yield is poised to fall below Japan's for the first time, marking a rare reversal between the two major Asian economies. Persistent economic softness, subdued inflation, and expectations for further monetary support have pushed China's yields lower. Japan's borrowing costs, meanwhile, have climbed amid concerns over fiscal spending and a shifting policy outlook. The crossover underscores how investors are reassessing China's growth trajectory and the broader balance of risks across Asian bond markets.

The Office of the Comptroller of the Currency has issued guidance allowing banks to hold cryptocurrency on their balance sheets to pay network fees, such as Ethereum gas fees. This move reflects a broader shift in regulatory stance toward crypto under the Trump administration, with the Federal Reserve and OCC clarifying rules for banks holding crypto on behalf of customers.

Senate Banking Chair Tim Scott said he expects committee votes on the crypto market structure bill next month, aiming to bring the legislation to the Senate floor in early 2026 for President Trump's approval. The proposal would divide oversight between the SEC and CFTC and introduce a new category for "ancillary assets," though bipartisan support remains uncertain as Democrats push alternative language focused on DeFi.

Richmond Federal Reserve President Thomas Barkin emphasized the importance of upcoming economic data in guiding the central bank's decisions at its December meeting, noting the challenge of assessing inflation and unemployment without official statistics following a federal shutdown.