Markets Turn Cautious Ahead of Key U.S. Data and December FOMC Decision

Index Update:  Market sentiment turned cautious ahead of key U.S. data releases — including the ISM Manufacturing PMI and the delayed September PCE report — as investors looked toward next week’s FOMC meeting, where markets are pricing an 87% chance of a 25 bps rate cut. Mega-cap tech stocks traded lower in premarket action, with declines across Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, Broadcom, and Tesla. Crypto-related stocks also weakened, led by a nearly 5% drop in Coinbase as Bitcoin retreated. Walmart and Target were largely steady as Cyber Monday sales began.

Market Movers:  On Friday, the top gainers were SMX (Security Matters) Public Limited Company. (+250.80%), followed by Twin Vee PowerCats Co. (+45.51%). On the contrary Rich Sparkle Holdings Limited (-38.57%), and Imperial Petroleum Inc. (-21.83%) declined the most the same day.

Commodities Update:  WTI and Brent crude prices rose about 2% to their highest levels in over a week after OPEC+ reaffirmed a three-month halt to production increases in early 2025, citing uneven demand and looming oversupply risks. Geopolitical tensions — including heightened U.S. rhetoric toward Venezuela — also supported prices, though gains remain limited by prospects of a Russia-Ukraine peace deal that could lift sanctions on Russian oil. Despite the uptick, crude ended November with a fourth straight monthly decline amid persistent supply-glut concerns. Gold climbed to a six-week high near USD 4,240 per ounce as expectations of a U.S. rate cut next week strengthened, driven by dovish Fed commentary and soft economic data following the government shutdown. Markets now see an 87% chance of a 25 bps cut. Strong central-bank buying and robust ETF inflows have helped position gold for its best annual performance since 1979.

Macro Updates:  The dollar index slipped to a two-week low near 99.3 as markets anticipate a possible final Fed rate cut of the year, with an 87% probability priced in following weak data and dovish Fed remarks. The greenback just posted its worst week in four months amid shifting rate expectations and reports that Kevin Hassett is the frontrunner to replace Jerome Powell — a move seen as favoring lower rates. With Trump saying he will soon announce his Fed chair pick, investors now await ADP payrolls and PCE data for further policy signals.

Bonds Commentary:  The U.S. 10-year Treasury yield climbed to 4.04%, extending Friday’s rebound despite growing expectations of a Fed rate cut next week, with markets pricing an 87% chance of a 25 bps reduction. Softer data and dovish Fed remarks have reinforced those bets, while attention has turned to reports that White House adviser Kevin Hassett is a leading contender to replace Jerome Powell — a move seen as supportive of lower rates. Investors now await this week’s ADP payrolls and PCE data for further policy signals.

Futures Update:  U.S. equity futures slipped early on Monday, even as the major indices ended the holiday-shortened week with gains of over 3%. The S&P 500 and Dow closed November higher, while the Nasdaq dipped 1.51% amid renewed concerns about stretched tech valuations and heavy AI-driven spending. Market sentiment has been buoyed by rising expectations of a quarter-point Fed rate cut at the December 9–10 meeting, with odds jumping to about 88% following dovish commentary from policymakers. However, uncertainty persists due to limited new economic data after the recent government shutdown. Investors now turn their attention to a busy week of U.S. indicators — including manufacturing, services, consumer sentiment, and private payrolls — while big-box retailers may attract scrutiny after strong online Black Friday spending.

The S&P 500 continues to trade in a strong medium-term uptrend, supported by rising 20-, 50-, 100-, and 200-day EMAs. The price has recently rebounded from the cluster of short-term EMAs and is attempting to break above the 6,850 zone, a key resistance aligned with the recent swing highs. Fibonacci retracement levels remain important reference points. The index is holding well above the 0.618 retracement (~6,124) and is now approaching the 0.786 retracement (~6,476) and the 1.0 extension target (~6,924). Sustained price action above 6,850 could open the door for a move toward 6,924, followed by the 1.272 extension near 7,494.  A rising dashed trendline from the April lows continue to provide structural support, with deeper downside cushioning near 6,550 and 6,300 (major EMA + trend support). RSI (14) has recovered back to ~59, signaling improving momentum without entering overbought territory. This supports the potential for further upside if buyers maintain control. Overall, the technical setup remains constructive, with upside bias intact as long as the index holds above the 6,550–6,600 support zone.