
The three major US indices logged a second day of losses on Tuesday as investors waited for Wednesday’s Federal Reserve decision, where a third consecutive 25 bps rate cut is widely expected. Markets have been moving cautiously, with Fed officials split between preventing further labor market weakness and avoiding renewed inflation.
Markets expect the Fed to cut rates as anticipated, but the real focus will shift to the Monetary Policy Statement, new economic projections, and Powell’s press conference for clues about additional cuts in early 2026.
S&P 500 slipped 0.1%, the Dow lost nearly 0.4%, while the Nasdaq 100 gained 0.1% on strength in Tesla, Broadcom and Alphabet. Meanwhile, small-cap stocks outperformed, with the Russell 2000 hitting an all-time intraday high as expectations of rate cuts support companies sensitive to borrowing costs.
In the Asian market, China’s inflation data for November showed that consumer inflation rose 0.7% year-on-year, its highest in nearly two years, driven mainly by higher food prices and the impact of government consumption-boosting measures.
At the same time, deflationary pressures persisted in the industrial sector. Producer prices fell 2.2% from a year earlier, extending their multi-year deflation streak and worsening slightly from October.
In the commodities market, silver hit a new record high in yesterday’s session as it jumped above $61 per ounce. The precious metal is still pushing higher as it’s trading above $61.30. Gold is stable above $4,200 as it’s been mostly trading in a range since the beginning of December.
The crypto market is showing signs of recovery as Bitcoin broke above $94,000 yesterday and Ethereum was a few dolalrs away from the $3,400 mark. ETF netflows to bitcoin reached their highest level in two weeks, indicating renewed interest from investors.
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