Markets ended the week modestly higher with the S&P 500 nearing its all-time high set in late October. For much of the week, the day-to-day commentary continued to revolve around AI stocks and concerns about their valuations, as well as the recent elevated volatility of Bitcoin, which some analysts have described as a sign of the broader market’s overall risk appetite. However, in some respects, it felt like markets spent the week biding their time, waiting for the Fed’s upcoming meeting.
The release of September’s relatively stable core personal consumption expenditures (PCE) inflation, coupled with data from payroll processor ADP showing 32,000 jobs were lost in November, added to the optimism that the Fed will cut rates by another 0.25% at this week’s meeting.
Beyond the anticipated hike, markets will be focused on how Fed Chair Jay Powell discusses the prospects for additional rate cuts in 2026. Some economists expect Powell to position the assumed December cut as a “hawkish cut” meaning he won’t suggest any further cuts for early 2026. Whatever the resulting narrative following the meeting, it will surely evolve as additional government data, delayed by the shutdown, is released over the course of December.
