It was all about the economy this last week. That really means the Fed decision on December 10th was in focus.
Monday
S&P 500 0.53% | NASDAQ 0.38%
US Manufacturing PMI signaled more weakness, coming in at 48.2 when 49 was expected. Below 50 signals a contraction in manufacturing. In a rare moment, Nvidia (NVDA) stock gained on the day while markets lost as a whole. They have, as of late, been the tide that lifts all ships.
Tuesday
S&P 500 0.25% | NASDAQ 0.59%
The trading day was led by moves in the “Magnificent Seven” stocks. Nvidia (NVDA) continued to march higher as things seemed more like a typical “risk on” day for markets. Gains were still modest, which was welcomed as the volatility of recent weeks recedes into the background.
Wednesday
S&P 500 0.30% | NASDAQ 0.17%
Jobs data out on Wednesday signaled continued weakness in the employment markets. There was an expectation of 5,000 job adds and rather 32,000 jobs were lost in October, per ADP non-farm payroll. The job losses coupled with services PMI data that came in stronger than expected give a goldilocks signal. It shows resilience in the economy; however jobs data will prompt a Federal Reserve Board (FRB) rate cut next week.
Thursday
S&P 500 0.11% | NASDAQ 0.22%
Trade was mixed, moving between gains and losses all day, but finished in the green. The Atlanta Fed updated their projections for Q4 GDP down .1% to 3.8%. What little optimism was there on Thursday was driven by successes in the overseas equity markets.
Friday
S&P 500 0.19% | NASDAQ 0.31%
The FRB’s preferred gauge of inflation reported on Friday, and it did not disappoint. Personal Consumption Expenditures (PCE) came in at 2.9% as expected. This buoyed markets to close out the week, as it increased the likelihood of a rate cut on the 10th. Rate-dependent sectors led growth, all-be-it meager.
Conclusion
S&P 500 0.31% | NASDAQ 0.91%
The FRB’s rate decision on the 10th was in focus. Market moves were dependent on data that could influence that. Interestingly, the market movement after the meeting will be based on the FRB’s messaging about the future. A signal of more or less rate cuts for 2026 will drive trade. This is also a key meeting where they deliver the dot plot for the coming year. The dot plot gives us a view into where FRB members believe rates should go over the next year.
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