Wall Street flat with investors looking ahead to upcoming Fed meeting

Indices

Major American indices are exhibiting a mixed but resilient performance in the latest session, consolidating near record highs. The S&P 500 6849.72 is trading just 0.6% below its all-time high, reflecting robust momentum after a recent rally. The NASDAQ Composite 23454.09 remains the best-performing index year-to-date, up 21.5%, and currently hovers in the mid-23,000 range. The Dow Jones Industrial Average 47827.51 holds steady near multi-month highs, with a year-to-date gain of 12.5%. Technical signals present a nuanced picture: both the S&P 500 and NASDAQ are showing flat micro-trends, indicating a pause for potential consolidation, while the S&P 500 also exhibits a strong short-term downward signal, suggesting short-lived selling pressure may emerge before the next directional move.

Stocks

Market focus today is on a combination of high-volume technology leaders and notable movers in both directions. NVIDIA Corporation (NVDA) 179.59, Apple Inc. (AAPL), and Amazon.com Inc. (AMZN) are among the most actively traded, with all three experiencing modest declines, indicating investor caution in high-valuation sectors. Microsoft Corporation (MSFT) is leading losses among mega-caps with a 2.5% drop, which has weighed on tech sentiment. Conversely, UnitedHealth Group Incorporated (UNH), Goldman Sachs Group Inc. (GS), and McDonald's Corporation (MCD) are among the session's top gainers, each advancing by over 2%, highlighting a rotation into defensives and financials.

Momentum stocks such as KALA BIO, Inc. (KALA) and PharmaCyte Biotech, Inc. (PMCB) are posting outsized gains, suggesting speculative activity at the market's periphery. On the downside, Microsoft’s decline and Boeing Company (BA)'s retreat are notable, reflecting some profit-taking in previous leaders. Recent news around Marvell Technology Group Ltd. (MRVL) and its acquisition of Celestial AI has supported the semiconductor sector, while Salesforce (CRM) and Dollar General (DG) have seen positive reactions to strong earnings reports.

Economic News

Recent economic data has played a pivotal role in shaping market sentiment. The latest jobs report showed weaker-than-expected hiring in November, which, coupled with robust growth in the U.S. services sector, is fueling optimism for a near-term Federal Reserve interest rate cut. Weekly jobless claims fell to 191000, the lowest since September 2022, underscoring labor market resilience and supporting risk appetite. The CME FedWatch Tool now places the probability of a 25 basis point Fed rate cut at 89.2, a level that has encouraged equity inflows despite inflation still sitting above target.

Corporate earnings have also influenced sentiment, with Dollar General (DG) surging 6.4% on better-than-expected profits and Salesforce (CRM) up 0.7% despite a slight revenue miss, as the market rewards AI-driven business models. The OECD has issued a cautionary note regarding a potential AI-fueled equity bubble, which could pose a risk to U.S. growth should market exuberance unwind.

Economic Events

The market is closely watching the Federal Reserve’s upcoming policy meeting, with high expectations for a rate cut announcement. Key economic events scheduled for this week include national CPI and core inflation releases, which will be critical in confirming or challenging the market’s dovish outlook. Durable goods orders and labor data are also on the radar, with any upside inflation surprise threatening to reprice rate cut expectations and pressure equity valuations, particularly in rate-sensitive sectors.

Internationally, central bank decisions and treasury bill auctions in Asia and Europe provide additional context for global risk sentiment and cross-asset flows, though U.S. policy remains the primary catalyst for domestic market direction.

Market Sentiment

Overall, market sentiment is characterized by cautious optimism. Investor positioning is supportive of risk assets, buoyed by the anticipated Fed easing and a string of strong corporate earnings, especially in technology and consumer sectors. However, overbought technical readings—such as the S&P 500’s Relative Strength Index (RSI) at 72.93—signal that markets could be vulnerable to pullbacks on negative news. The VIX remains in the mid-teens, indicating a generally calm risk environment but with the potential for sharp increases in volatility should economic surprises emerge. Breadth is uneven, with headline indices strong but stock-level dispersion suggesting selective participation and the importance of disciplined risk management.

Please note that the analysis is for informational purposes only and does not constitute financial advice. Users should conduct their own research.