Wall Street futures surged in overnight trading Sunday as investors sought to rebound ahead of the Thanksgiving holiday week after a turbulent November. The Dow Jones Industrial Average futures gained 200 points, S&P 500 futures rose 0.6%, and Nasdaq-100 futures increased 0.8%.
Markets will be closed Thursday for Thanksgiving and close early Friday at 1 pm ET, resulting in a shortened week with lower trading volumes expected.
Despite Friday’s bounce sparked by insights from New York Fed President John Williams, major indexes remain heavily pressured for the month. The S&P 500 declined 2% last week, reflecting a 3.5% drop for November. The Nasdaq Composite shed 2.7% last week and is down 6.1% month-to-date, while the Dow slid 1.9% last week and 2.8% for the month.
With few catalysts ahead of the December Federal Reserve meeting, volatility and uncertainty are expected to persist, especially amid thinner trading volumes.
Reports have also emerged that the US government is poised to permit Nvidia Corp. to resume sales of its advanced AI chips to China after a prior suspension due to export controls, but that review is ongoing.
Surge in Fed rate cut expectations
Investor expectations for a December rate cut jumped after John Williams indicated room for a further rate adjustment to bring policy closer to neutral. Futures markets now assign nearly a 70% probability for a quarter-point cut at the December 10 Fed meeting, up from about 44% a week earlier. The federal funds rate currently sits between 3.75% and 4.00%.Goldman Sachs Research supports the case for a December cut, anticipating the Fed’s proactive approach to managing potential risks to the economy while forecasting two additional rate cuts in 2026 amid a cooling labor market. However, some Wall Street economists express caution, with a lower probability for cuts reflecting mixed signals from inflation and jobs data disrupted by government shutdowns.
Economic data delays
The Bureau of Labor Statistics canceled its October consumer price index (CPI) report and postponed November’s CPI release until after the Fed’s December meeting, complicating the Federal Reserve’s policy decision-making process.
These delays add to market uncertainty, limiting critical inflation data available ahead of the rate-setting meeting. Key upcoming data include October retail sales and Producer Price Index reports due Tuesday, which may influence investor expectations and Fed policy outlook.
Investor sentiment remains cautious amid reevaluation of sky-high valuations in AI-linked stocks that drove much of the year’s market gains. According to Mark Malek, Chief Investment Officer at Siebert Financial, investors “hate noise” and “crave certainty,” which the current market environment fails to provide.