Stock Market Today: Dow Slips, Gold Price Breather, Bitcoin Trades at 20-Month High; Uber, Spotify, and More Premarket Movers
"Stock futures slip ahead of economic data, but Wall Street hopes for rate cuts. U.S. markets back to 12-month highs."
U.S. stock futures took a dip on Monday as investors gear up for a week of economic data releases, including the latest jobs report. All eyes are on these numbers, which will either confirm or reshape expectations about interest rates. The hope for rate cuts has driven the recent stock market rally, with the Dow Jones Industrial Average futures falling 0.3%, and the S&P 500 and Nasdaq futures down 0.4% and 0.5% respectively.
This slow start to December stands in stark contrast to the strong showing of November, with the S&P 500 experiencing its best month in over a year. The bullish sentiment is fueled by the optimism that the Federal Reserve has finished raising interest rates and could potentially cut them in the coming year. The possibility of rate cuts as early as March has been a key driver in the recent market rally.
Federal Reserve Chairman Jerome Powell's comments on monetary policy achieving its goals have contributed to market optimism. However, it remains uncertain whether this will lead to a "Santa Rally" as the U.S. markets return to 12-month highs. Investors are eagerly awaiting the Federal Open Market Committee's upcoming rate decision, set for December 12 and 13.
The closely watched jobs report, covering nonfarm payrolls, is a key focus for investors this week. Additionally, U.S. factory orders for October will be released on Monday. The outcome of these economic data releases will play a crucial role in shaping market movements.
Investors are looking for signs that the economy is no longer running hot, with inflation and growth moderating enough to support the lowering of borrowing costs. However, they also do not want to see signs of undue weakness, which could indicate a worrying slowdown in the economy.
Treasury yields have been a source of pressure on stocks, with yields ticking higher after a significant drop last week due to the swift shift in rate-cut expectations. The yield on the benchmark 10-year U.S. Treasury note rose to 4.26%, signaling concerns that the rate cut expectations may have gone too far. This rise in yields has dampened demand for riskier bets, such as tech stocks, contributing to the early struggles of the Nasdaq.
As the week unfolds, investors will closely monitor the economic data releases and the Federal Reserve's upcoming rate decision, which will have a significant impact on market movements. The outcome of these events will shape the market's trajectory and determine whether the recent rally in stocks will continue.