Equities Gain, Commodities Strengthen, and Rate-Cut Bets Rise

Index Update:  U.S. stocks advanced on Tuesday, with the Dow up 0.39%, the S&P 500 rising 0.25%, and the Nasdaq gaining 0.59%, supported by a rebound in Bitcoin and optimism for a potential year-end rally. Markets now see an 89% likelihood of a 25 bps Fed rate cut next week. Investors are awaiting the November ADP jobs report for labor market cues. In earnings news, Marvell Technology surged nearly 10% after strong Q3 results and upbeat data-center guidance, while American Eagle Outfitters jumped 10% on expectations of solid holiday sales.

Market Movers:  On Tuesday, the top gainers were Polyrizon Ltd.(+131.96%), followed by Eventbrite, Inc. (+78.63%). On the Magnite, Inc. (-96.75%), and Janux Therapeutics, Inc. (-53.34%) declined the most the same day.

Commodities Update:  WTI and Brent crude prices rose on Wednesday as attacks on Russian energy assets lifted supply-risk premiums despite lingering concerns about global oversupply. Strikes on Russian tankers and refineries, threats of retaliation, stalled U.S.–Russia peace efforts, sanctions-driven shipping disruptions, and geopolitical tensions with Venezuela all supported prices, partly offsetting increased output from OPEC+ and major producers. Gold hovered near a six-week high around $4,210 per ounce on expectations of a Fed rate cut, helped by softer U.S. data and slightly lower Treasury yields. Silver traded near record highs around $58 per ounce, up nearly 100% this year, driven by tightening supply, strong ETF inflows, low inventories, and anticipation of deeper Fed easing.

Macro Updates:  U.S. mortgage applications fell 1.4% in late November to a nearly three-month low, despite mortgage rates easing to 6.32%. Refinancing activity dropped 4.4%, while purchase applications rose 2.5% to their highest level since early 2023. Lower rates followed increased expectations of a December Fed rate cut, but overall demand remained subdued amid an uncertain economic outlook, according to the Mortgage Bankers Association.

Bonds Commentary:  The 10-year U.S. Treasury yield hovered near 4.08% on Wednesday, stabilizing after earlier gains as investors reassessed the Fed outlook. Markets now see an 89% chance of a 25 bps rate cut next week and expect about 90 bps of easing through 2026. Dovish sentiment was strengthened by speculation that Kevin Hassett may become the next Fed chair. Investors are awaiting the November ADP jobs report, while earlier global bond-market pressures had briefly pushed yields higher.

Futures Update:  U.S. stock futures edged higher on Wednesday, supported by rising expectations of a Federal Reserve rate cut and a recovery in Bitcoin, which helped improve market sentiment. As of early morning trade, futures tied to the Dow, S&P 500, and Nasdaq 100 were all up around 0.2%. This followed gains in the previous session, where major Wall Street indices managed to rebound despite a cautious start to the week.

Stocks experienced fluctuations throughout Tuesday’s trading session, initially moving upward before settling with a generally positive bias. The S&P 500 rose by 16.76 points, or 0.25%, closing at 6,829.38. From a technical perspective, the index sustained support at important levels and gradually advanced. It also remains above its key moving averages, indicating a bullish trend. However, considering the price action over the previous two sessions, there is a possibility of a mild correction in the near term. The 14-day Relative Strength Index (RSI) is rebounding from lower levels, further supporting a positive outlook. Key support levels are around 6,690, while resistance is expected near 6,890.