Stock Market Update

Equity futures point to a flattish opening amid another relatively quiet morning as investors await tomorrow's FOMC decision. 

The market has nearly priced in a 25-basis point rate cut at the December meeting, though the expectation is that the Fed will dampen the odds of an additional cut in January. 

Stocks mostly retreated yesterday, with ten S&P 500 sectors finishing lower, though a solid gain in the information technology sector limited losses and kept the major averages at or above their unchanged levels for December. 

NVIDIA (NVDA 187.01, +1.44, +0.8%) is up again in the premarket this morning after President Trump announced via Truth Social that he will allow the company to sell its advanced H200 chips to China in exchange for the U.S. government receiving 25% of the profits. 

Investors will receive a modest batch of economic data today, including the preliminary Q3 Productivity (Briefing.com consensus 3.5%) and Unit Labor Cost (Briefing.com consensus 0.9%) readings, along with the September JOLTS Job Openings Report. 

The November NFIB Small Business Optimism checked in at 99.0 (Briefing.com consensus 98.3) from a prior reading of 98.2.

In corporate news:

• OpenAI could pause side projects to focus on making improvements to ChatGPT, according to The Wall Street Journal.
• Autozone (AZO 3,675.00 -91.96, -2.4%) missed EPS expectations by $1.67 and reported revenues in-line.
• Home Depot (HD 342.80, -7.11, -2.0%) trades lower after reaffirming its FY26 outlook, expecting a 5% EPS slide. 

Reviewing overnight developments:

Equity indices in the Asia-Pacific region were mostly lower Tuesday, registering modest losses on a lack of buyer conviction ahead of Wednesday's closely watched FOMC decision. Japan's Nikkei: +0.1%, Hong Kong's Hang Seng: -1.3%, China's Shanghai Composite: -0.4%, India's Sensex: -0.5%, South Korea's Kospi: -0.3%, Australia's All Ordinaries: -0.4%.

In news:

• The Reserve Bank of Australia kicked things off Tuesday, voting unanimously to leave its cash rate unchanged at 3.60%, as expected; however, it was a more hawkish-minded decision, as RBA Governor Bullock reportedly said in the Q&A that rate hikes would need to be considered if inflation remains persistent.
• Japan had a JGB 5-yr auction that was met with okay demand. Finance Minister Katayama conveyed an intervention-minded tone, saying the action in the bond market is being closely monitored and that FX moves are concerning.
• The Bank of Korea, aiming to stabilize rising rates, is making its first bond purchase since 2022.
• Separately, China's President Xi talked up the idea of reinforcing growth momentum, while President Trump said he is going to allow NVIDIA to ship its H200 chips to approved customers in China, with 25% of any sales going to the U.S.

In economic data:

• Japan's M2 Money Stock 1.8% yr/yr (expected 1.4%; prior 1.6%); November Preliminary Machine Tool Orders 14.2% (prior 16.8%)
• Australia's November NAB Business Confidence 1 (prior 6); October Building Approvals -6.4% m/m (expected -6.4%; prior 12.0%)

Major European indices are mixed, with buyers and sellers lacking conviction ahead of key central bank decisions this week and next. STOXX Europe 600: -0.1%, Germany's DAX: +0.2%, UK's FTSE 100: +0.2%, France's CAC 40: -0.6%, Italy's FTSE MIB: +0.2%, Spain's IBEX 35: -0.1%.

In news:

• The FOMC is expected to announce a "hawkish cut" on Wednesday.
• The BOE and ECB have policy meetings next week. France has a key vote today on its social security budget; the UK registered some relatively weak retail sales heading into the holiday season; and ThyssenKrupp is down over 7% after its FY26 adjusted EBIT guidance failed to live up to stronger expectations.

In economic data:

• Germany's October Exports 0.1% m/m (expected -0.2%; prior 1.5%) and Imports -1.2% m/m (expected 0.2%; prior 3.1%)
• UK's November BRC Retail Sales Monitor 1.2% (expected 2.6%; prior 1.5%)