SPX: Investors bet on December's cutDuring Thanksgiving week, markets were in a positive, holiday mood, bringing US equities to higher grounds. The S&P 500 had a five-day positive streak, moving from 6.530 up to 6.850 points on Friday. The mood among investors has shifted again back toward a more risk-on stance, as the market is now about 80% confident that the Fed will cut interest rates at December FOMC meeting. Many stocks included in the index are now trading at new all time highest levels, some of which are General Motors, Hilton Worldwide, Walmart stores.
Tech companies also gained during the previous week, as confidence in AI was restored supported by some promising macro developments. Meta was one of the biggest winners, surging around 9% for the week. Microsoft was traded higher by more than 4%, however, Nvidia continues to lag in gains. Company shares continued to decline, losing around 2% on a weekly basis and highlighting uneven sentiment among the tech sector.
The week ahead brings PCE data for September. This indicator is the Fed's favourite inflation gauge, in which sense, Friday might bring some higher volatility. Nervousness will be increased, considering that these data will be taken into account by FOMC members when voting for a rate cut. On the opposite side, starting with the week ahead, we are entering into the last trading month of the year, when investors are seeking positive sentiment to book yearly profits.
