Global Markets Snapshot Ahead of Key Fed Decision

Index Update:  The Federal Reserve is widely expected to deliver a third consecutive 25 bps rate cut, but investor attention is centred on the updated economic projections amid divisions among policymakers over further easing. In premarket trading, megacap tech stocks were mixed: Nvidia inched higher and Apple and Amazon were flat, while Microsoft, Meta, and Alphabet slipped, contrasting with a modest gain in Oracle ahead of its earnings.

Market Movers:  On Tuesday, the top gainers were Aimei Health Technology Co., Ltd (+1,006.25%), followed by Oriental Culture Holding LTD (+291.98%). On the contrary, Top Wealth Group Holding Limited (-72.74%), and WEBUY GLOBAL LTD. (-47.04%) declined the most the same day.

Commodities Update:  WTI and Brent crude were steady near $58 and $62 per barrel, respectively, after a recent slide, as worries over excess global supply persisted. Higher projected U.S. output, upcoming IEA and OPEC reports, and developments in the Russia–Ukraine conflict kept traders cautious, while mixed U.S. inventory data added to uncertainty. Markets also awaited the Federal Reserve’s decision, with a possible rate cut seen as modest support for future fuel demand. Gold held around $4,210 per ounce in a tight range ahead of an expected Fed cut, with strong central-bank and ETF demand helping lift prices sharply this year. Silver extended gains above $61 to fresh records on expectations of looser U.S. policy and tightening physical supply, supported by robust industrial demand from solar, EVs, and data-center growth.

Macro Updates:  U.S. mortgage applications rose 4.8% in early December, the biggest gain in six weeks, driven by a sharp 14.3% jump in refinancing activity, which is now almost 90% higher than a year ago and accounts for a larger share of total applications. Lower FHA rates—down to 6.08%, the lowest since September 2024—spurred a 24% surge in FHA refinances, while overall 30-year conforming mortgage rates were little changed at 6.33%. Home-purchase applications dipped 2.4% on the week but remained nearly 20% above year-ago levels, with more buyers turning to FHA loans to benefit from lower down-payment options despite still-elevated borrowing costs.

Bonds Commentary:  U.S. Treasury yields held near multi-month highs ahead of the Fed decision, with the 10-year around 4.2% and the 30-year above 4.8%. Although another 25 bps cut is expected, investors are focused on the Fed’s projections for 2026 amid doubts that easing will continue given sticky inflation and divisions among policymakers. Rising headline PCE and uncertainty over the next Fed Chair have added to caution and pushed yields higher.

Futures Update:  U.S. stock futures edged slightly lower on Wednesday as markets awaited the Federal Reserve’s policy decision, which is expected to shape sentiment into 2025. Around early morning trade, futures on the Dow, S&P 500, and Nasdaq slipped about 0.1% each. The previous session closed mixed: the Dow and S&P 500 weakened, while the Nasdaq inched up 0.1%, with investors focused on the Fed’s ongoing two-day meeting.

Following a modest pullback during Monday's trading, stocks exhibited a lackluster performance in Tuesday's session. The S&P 500 declined by less than one-tenth, closing at 6,840.50. From a technical perspective, the index held support at important levels and gradually moved higher. It remains above its key moving averages, indicating a bullish trend. However, due to relatively low participation at current levels, there is a slight possibility of a mild correction in the near term. The 14-day Relative Strength Index (RSI) remains above the midpoint, supporting a positive outlook. Key support levels are around 6,730, with resistance expected near 6,955.