MARKET WRAP

It was a pretty sleepy tape today as the SPX chopped to a slight loss as traders await tomorrow’s Fed decision and Powell commentary. The broader market has essentially flatlined since the Thanksgiving week ramp higher, while yields quietly crept higher. IWM is back to all time highs while the SPX and QQQ remain slightly below. On the day: SPX -0.1%, QQQ +0.2% and IWM +0.2%.

It was fairly tame elsewhere, but the US10YY was a tick higher again, now just shy of 4.19%. The VIX crept a bit higher today, now 16.93.

Notable Moves Today: Sector-wise it was a mixed bag: energy was strong, while tech was mixed, real estate and healthcare were lower.

After Hours: GME is -5% following it’s report. QQQ and SPY are both a tick lower after hours (not because of Gamestop)

Today’s MRKT Call: Dan and Guy run through the market heading into the rate cut, AVGO into earnings, and the speculative trade with Chris Veronne on bitcoin, small caps, financials, and the Fed, then wrap with a quick look at how things might play out into year-end.

Today’s RiskReversal Pod: Guy and Liz on year-end market vibes and how 2026 may shake out, from bonds and rate-cut expectations to deficits, data, M&A chatter, sector rotations, and where things like gold, healthcare, and biotech might be headed next.

MRKT MATRIX: TODAY’S TOP STORIES

• S&P 500 is little changed as traders brace for Fed decision, Dow dragged down by JPMorgan (CNBC)

• JPMorgan Drops as Bank Warns of Higher-Than-Expected Costs (Bloomberg)

• The Fed decision is expected to feature a rate cut and a lot more. Here’s what to expect (CNBC)

• Kevin Hassett Says He Wouldn’t Bow to Pressure Over Cutting Interest Rates (WSJ)

• Consumer Loans Are Getting Harder to Tally—and the Risks Harder to Gauge (WSJ)

• Private Equity Deal Boom Is Finally Happening, Goldman CFO Says (Bloomberg)

• SpaceX to Pursue 2026 IPO Raising Far Above $30 Billion (Bloomberg)

• Nvidia AI Chips to Undergo Unusual U.S. Security Review Before Export to China (WSJ)

• China set to limit access to Nvidia’s H200 chips despite Trump export approval (FT)

• Sam Altman’s Sprint to Correct OpenAI’s Direction and Fend Off Google(WSJ)

WHAT’S NEXT?

Bitcoin ramped higher this morning. It traded as high as $94.5k before settling back near $93k by the end of the equity session; the $94k level has capped upside moves several times over the past few weeks. Any grind higher toward $100k would likely be a sentiment boost in the overall momentum/speculative sectors in equities. As mentioned, equities and BTC have seemingly re-paired intraday over the past couple of weeks after decoupling during crypto’s sharper selloff.

Looking ahead to tomorrow, a 25bp rate cut is sitting at roughly 87% odds and that probability has held steady all week. Something to watch with IWM sitting at all-time highs, is any reaction in small caps, especially to guidance around the Fed’s path forward.

Implied volatility picks up tomorrow relative to recent sessions, though it’s still muted compared to prior FOMCs. The SPX expected move for tomorrow is just shy of 0.7%, with the expected move through Friday’s close around 1.2%, versus recent Fed meetings where the decision day alone was often pricing in closer to 0.9–1.0% moves. The bigger questions answered may take place in the days that follow Powell’s presser. The last meeting, when uncertainty around the Fed’s path into 2026 was first introduced, began the bout of recent volatility we just emerged from.

The FOMC isn’t the only thing going on to tomorrow as the reaction to ORCL’s results after the bell will be of major interest given the recent roundtrip that stock just did, with potential ramifications elsewhere on the AI buildout trade:

• Wednesday

  • Pre-market: CHWY 9.5%

  • 2pm - Fed Rate Decision

  • 2:30pm - Powell Presser

  • After-hours: ORCL 10%, ADBE 7%, SNPS 7%

• SPX Expected Move: 0.7%

• TLT Expected Move 0.6%

TODAY’S EPISODES

Watch MRKT Call’s newest episode: Stocks Pause, Crypto Green Ahead of Fed Meeting

Dan and Guy break down the state of the market heading into the rate cut, including thoughts on AVGO into earnings amid Nvidia/China headlines. Chris Veronne joins to talk bitcoin, small caps, and the broader speculative trade, along with strength in financials, whether PE firms can bounce, and open questions around small caps, energy, and bonds. He also weighs in on the Powell transition at the Fed, before Dan and Guy wrap up with a look at how markets may shape up into year-end.

• Analysis - SPX, BTC, AVGO, NVDA, XLF, IWM, GS, JPM, APO, XOM, TLT, KWEB, BABA, BIDU, PLTR, VIX, 

• Your Questions:

  • Gary Webb - Do you see the small cap move as sustainable?

  • Ramesh - If you had to trim two of the Mag7 stocks right now, which 2 would they be?

  • Allar - When’s the Santa Claus Rally begin?

Learn more about our sponsor, CME Group.

Watch RiskReversal Podcast’s newest episode: 2026 Could Get Weird...

In this episode of the RiskReversal Podcast, Guy Adami and Liz Thomas discuss various market developments as the year-end approaches. They focus on the bond market's reaction to anticipated rate cuts and the possible implications of rising treasury yields. The conversation also touches on concerns about the U.S. government deficit, liquidity issues, currency volatility, and the upcoming change in Fed leadership. They analyze potential economic data impacts, such as PPI, Jolts, and retail spending figures. The discussion expands to the rising activity in mergers and acquisitions, the performance of consumer staples versus consumer discretionary stocks, and the global trends in yield movements. Finally, they explore the outlook for gold, healthcare, and biotech sectors for 2026, along with potential market rotations and valuations.

Learn more about our sponsor SoFi and RBC Capital Markets.

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