Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.6%), Nasdaq Composite (+0.3%), and DJIA (+1.0%) are in the midst of some choppy action, currently sitting at session highs as investors react to Fed Chair Jerome Powell's comments at the press conference portion of today's FOMC meeting. 

Mr. Powell's comments fulfilled the market's expectations that today's rate cut would come with a hawkish tilt. In particular, the statement "I would note having reduced our policy rate by 75 basis points since September, and 175 basis points since last September, the Fed funds rate is now within a broad range of estimates of its neutral value, and we are positioned to wait and see how the economy evolves" echoes the sentiment that the FOMC will not be quick to provide additional easing in the near term. 

While the median estimate for the change in real GDP was revised up to 2.3% from 1.8%, the median estimate for the unemployment rate held steady at 4.4%, and the outlook for PCE inflation was revised down to 2.4% from 2.6%, the Summary of Economic Projections still shows a median estimate of just one rate cut in 2026, unchanged from September. 

Still, the major averages are noticeably improved from their pre-meeting levels, with each index now sitting above its unchanged week-to-date level.

[BRIEFING.COM] As expected, the FOMC voted to cut the target range for the fed funds rate by 25 basis points to 3.50-3.75%. That vote was not unanimous (also expected). It was 9-to-3, with Fed Governor Miran dissenting in favor of a larger 50-basis-point cut and Chicago Fed President Goolsbee and Kansas City Fed President Schmid preferring no change.

The directive noted that downside risks to employment rose in recent months and that inflation has moved up since earlier in the year and remains elevated.

The Summary of Economic Projections (SEP) showed a median estimate of one rate cut in 2026, unchanged from the September SEP. The median estimate for the change in real GDP was revised up to 2.3% from 1.8%; meanwhile, the median estimate for the unemployment rate held steady at 4.4%, as the outlook for PCE inflation was revised down to 2.4% from 2.6%. The longer-run neutral rate remained at 3.0%.

Today's decision also featured an announcement that the Fed will begin purchasing Treasury bills, starting December 12, to the tune of $40 billion per month before likely being "significantly reduced" after a few months, noting that reserve balances have declined to ample levels.

The initial reaction to the Fed's update has been positive but somewhat measured ahead of Fed Chair Powell's press conference. The purchase of Treasury bills and sticking with a median estimate of one rate cut for 2026, while clearly not expecting any economic slowdown or any pickup in inflation, have been placating influences for a market braced for a rejoinder that there might not be another rate cut for an extended period.

Perhaps Fed Chair Powell will deliver that message, but for now, the market looks content that the message so far about the forward view isn't decidedly hawkish-minded.

The Russell 2000 is up 0.8%, the Dow Jones Industrial Average is up 0.5%, the S&P 500 is up 0.2%, and the Nasdaq Composite is down 0.2%.

[BRIEFING.COM] The tech-heavy Nasdaq Composite (-0.41%) is in last place as we approach two hours left on the session; looking ahead to the top of the hour the FOMC will announce its latest policy decision and the Treasury is slated to release its monthly budget report.

Gold futures settled $11.50 lower (-0.3%) at $4,224.70/oz, as traders took profits and positioned cautiously ahead of the Fed meeting, with firmer Treasury yields briefly denting demand for non-yielding assets. Momentum in other metals, particularly silver, also drew some attention away from bullion, keeping gold on the back foot.

Meanwhile, the U.S. Dollar Index is down about -0.3% to $98.97.

[BRIEFING.COM] The Dow Jones Industrial Average (+0.38%) is in first place on Wednesday afternoon, up about 181 points.

A look inside the DJIA shows that Nike (NKE 65.22, +1.89, +2.98%), American Express (AXP 373.07, +9.16, +2.52%), and Johnson & Johnson (JNJ) hold solid gains.

Meanwhile, Microsoft (MSFT 477.12, -14.90, -3.03%) is at the bottom of the average.

The DJIA is now -0.45% lower week-to-date.

[BRIEFING.COM] The S&P 500 (+0.1%), Nasdaq Composite (-0.2%), and DJIA (+0.4%) have spent the first half of today's action in a familiar, muted fashion ahead of the 2:00 p.m. ET FOMC decision. 

The market has been expecting a 25-basis point rate reduction at the December FOMC meeting for the past several weeks, though it is anticipated that commentary will have a hawkish tilt toward additional near-term easing. 

As a result, equities have seen some subdued sessions this week, with the major averages holding modest week-to-date losses as a result. 

The tech-heavy Nasdaq Composite trails its peers today as the information technology sector (-0.6%) lags, though the sector has rebounded from even steeper losses this morning. Microsoft (MSFT 481.76, -10.26, -2.09%) and NVIDIA (NVDA 182.84, -2.13, -1.15%) are the worst-performing "magnificent seven" names today, putting pressure on the Vanguard Mega Cap Growth ETF (-0.4%). 

Meanwhile, Oracle (ORCL 219.72, -1.82, -0.82%) and Broadcom (AVGO 403.37, -2.92, -0.72%) trade with more modest losses ahead of their earnings reports this week. 

The communication services sector (-0.4%) also faces some mega-cap weakness from Meta Platforms (META 649.92, -7.04, -1.07%).

Elsewhere in the sector, Warner Bros. Discovery (WBD 29.54, +1.28, +4.51%) widens its week-to-date gain to 13.3% as the takeover battle for the company intensifies. Bloomberg reported that Paramount Skydance (PSKY 14.83, +0.19, +1.27%) could substantially increase its unsolicited all-cash $30 per share offer. 

The utilities sector (-0.4%) rounds out the three retreating S&P 500 sectors, while eight trade higher. 

Gains are relatively modest, which has several sectors vying for the top spot on today's leaderboard.

The health care sector (+0.8%) is one of those names, rebounding from a 1.0% slide yesterday. The sector has faced pressure in December after a run of outperformance in November that coincided with some shakiness in the AI trade. 

The industrials sector (+0.8%) holds a nearly identical gain, supported by a rally in GE Vernova (GEV 713.12, +87.82, +14.04%) after the company issued upbeat guidance and provided an optimistic long-term financial outlook. 

Finally, the consumer discretionary sector (+0.8%) rounds out the three-way tie atop today's standings. Amazon (AMZN 231.45, +3.53, +1.55%) and NIKE (NKE 65.28, +1.96, +3.09%) provide solid support, while strength in homebuilder names sends the iShare U.S. Home Construction ETF 1.4% higher. 

Outside of the S&P 500, the Russell 2000 (+0.1%) adds modest gains to this week's run of outperformance, reflecting the prevailing view that the Fed will deliver a rate cut at today's meeting.

Overall, the broader market continues to drift in wait-and-see mode, with investors reluctant to make meaningful moves until Fed Chair Powell's remarks provide clearer direction this afternoon.

Reviewing today's data:

• Weekly MBA Mortgage Applications Index 4.8%; Prior -1.4%
• Q3 Employment Cost Index 0.8% (Briefing.com consensus 0.9%); Prior 0.9%
  • The key takeaway from the report is that it was an inflation-friendly report, evidenced by wages and salaries decelerating on a year-over-year basis for civilian workers (3.5% vs 3.9% a year ago), private industry (3.6% vs 3.8% a year ago), and state and local government workers (3.5% vs 4.6% a year ago).