Stock Index Futures Gain on Fed Rate-Cut Optimism, U.S. Economic Data on Tap

December S&P 500 E-Mini futures (ESZ25) are up +0.34%, and December Nasdaq 100 E-Mini futures (NQZ25) are up +0.42% this morning, buoyed by rising expectations for a Federal Reserve rate cut next month, while investors await a new round of U.S. economic data.

In yesterday’s trading session, Wall Street’s major indexes closed higher. Keysight Technologies (KEYS) climbed over +10% and was the top percentage gainer on the S&P 500 after the technology company posted upbeat FQ4 results and issued above-consensus FQ1 guidance. Also, Applied Materials (AMAT) advanced +5% and was among the top percentage gainers on the Nasdaq 100 after UBS upgraded the stock to Buy from Neutral with a price target of $285. In addition, homebuilder stocks climbed after the benchmark 10-year T-note yield fell to a 3-1/2-week low, with Builders FirstSource (BLDR) surging over +8% and D.R. Horton (DHI) rising more than +5%. On the bearish side, Nvidia (NVDA) slid over -2% and was the top percentage loser on the Dow after The Information reported that Meta Platforms was in discussions to spend billions on Google’s AI chips.

Economic data released on Tuesday showed that U.S. retail sales rose +0.2% m/m in September, weaker than expectations of +0.4% m/m, and core retail sales, which exclude motor vehicles and parts, grew +0.3% m/m, in line with expectations. Also, the U.S. Conference Board’s consumer confidence index fell to a 7-month low of 88.7 in November, weaker than expectations of 93.5. In addition, the U.S. producer price index for final demand rose +0.3% m/m and +2.7% y/y in September, in line with expectations. Finally, data from ADP Research showed that U.S. companies shed an average of 13,500 jobs per week in the four weeks ending November 8th.

“Downbeat economic data is delivering gains to stock and bond bulls alike, as weaker-than-expected retail sales and consumer confidence numbers coincide with accelerating job losses and rising odds of a December Fed cut,” said Jose Torres, senior economist at Interactive Brokers.

Meanwhile, Bloomberg reported that White House National Economic Council Director Kevin Hassett has emerged as the leading candidate to become the next Fed chair, a choice investors view as aligned with President Trump’s push for lower rates.

U.S. rate futures have priced in an 80.8% chance of a 25 basis point rate cut and a 19.2% chance of no rate change at December’s monetary policy meeting.

Today, investors will focus on U.S. Durable Goods Orders and Core Durable Goods Orders data for September, set to be released in a couple of hours. The figures were originally scheduled for release on October 27th, but were delayed due to the government shutdown. Economists expect September Durable Goods Orders to climb +0.5% m/m and Core Durable Goods Orders to rise +0.2% m/m, compared to the prior numbers of +2.9% m/m and +0.3% m/m, respectively.

U.S. Initial Jobless Claims data will also be closely monitored today. Economists estimate this figure will come in at 226K, compared to last week’s number of 220K.

The U.S. Chicago PMI will be released today. Economists forecast the November figure at 44.3, compared to the previous value of 43.8.

The EIA’s weekly crude oil inventories report will be released today as well. Economists expect this figure to be -1.3 million barrels, compared to last week’s value of -3.4 million barrels.

Later today, the Fed will release its Beige Book survey of regional business contacts, which provides an update on economic conditions in each of the 12 Fed districts. The report will likely underscore weakness in employment and activity. The Beige Book is published two weeks before each meeting of the policy-setting Federal Open Market Committee.

On the earnings front, farm and construction equipment maker Deere & Company (DE) is set to report its FQ4 results today.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.002%, up +0.05%.

The U.S. stock and bond markets will be closed on Thursday in observance of the Thanksgiving Day holiday.

The Euro Stoxx 50 Index is up +0.41% this morning, buoyed by rising expectations for a Fed rate cut next month. Also aiding sentiment were signs of progress in Ukraine peace talks. Ukrainian President Volodymyr Zelenskiy signaled a readiness to advance a U.S.-backed framework to end the war. Strength in technology, mining, and bank stocks lent support to the overall market on Wednesday. Meanwhile, the International Monetary Fund said on Wednesday in a report that Germany’s landmark reform of its fiscal rules earlier this year has laid the groundwork for economic recovery, though medium-term prospects remain limited. In other news, the European Central Bank said Eurozone lenders with sizable dollar operations should strengthen their liquidity and capital buffers to withstand any potential squeeze in the U.S. currency. Investor focus now shifts to U.K. Chancellor Rachel Reeves’ high-stakes budget for 2026. In corporate news, HBX (HBX.E.DX) fell over -4% after the company posted a wider-than-expected full-year loss.

The European economic data slate is empty on Wednesday.

Asian stock markets today closed mixed. China’s Shanghai Composite Index (SHCOMP) closed down -0.15%, and Japan’s Nikkei 225 Stock Index (NIK) closed up +1.85%.

China’s Shanghai Composite Index closed slightly lower today amid a lack of fresh domestic catalysts. Real estate stocks underperformed on Wednesday. China’s property market is bracing for a deepening crisis at state-backed China Vanke, as the developer struggles to reassure investors it can avoid default in the coming months without more explicit signs of government support. At the same time, AI-related stocks advanced on Alibaba’s plan to continue investing “aggressively” in AI infrastructure. Meanwhile, UBS Asset Management said Chinese equities remain attractively valued and continue to offer macro upside potential. In other news, Reuters reported on Wednesday that China purchased at least 10 cargoes of U.S. soybeans worth roughly $300 million in deals signed since Tuesday, one day after the presidents of both countries held a phone call. In corporate news, NIO slid over -6% in Hong Kong after the automaker provided soft Q4 guidance. Investors now await China’s October industrial profit data, scheduled for release on Thursday, to see whether the stretch of strong profits continued following a sharp increase in September and a stronger-than-expected increase in August. Market participants also look ahead to the Politburo meeting and the Central Economic Work Conference in December for signals on next year’s policy agenda.

Japan’s Nikkei 225 Stock Index closed higher today, tracking an overnight rally on Wall Street. Takamasa Ikeda, a senior portfolio manager at GCI Asset Management, said, “Expectations of more Fed rate cuts lifted U.S. stocks overnight, and that supported gains in the Japanese stock market today.” Technology and financial stocks led the gains on Wednesday. Data from the Bank of Japan released on Wednesday showed that a leading indicator of Japan’s service-sector inflation climbed 2.7% in October from a year earlier, indicating that labor shortages continue to push companies to pass on rising costs. Separately, data from the Cabinet Office showed that Japan’s September leading economic indicators index, which gauges the economic outlook for a few months ahead based on data such as job offers and consumer sentiment, was revised upward. Meanwhile, Japanese government bonds declined on Wednesday, with short-term yields reaching 17-year highs, as investors assessed the financial strain of a large stimulus package and the likelihood of a near-term BOJ rate hike. Reuters reported on Wednesday that the BOJ is laying the groundwork for a possible interest rate hike as early as next month, reviving earlier hawkish messaging as concerns over the yen’s sharp declines resurface and political pressure to maintain low rates begins to ease. Japanese Prime Minister Sanae Takaichi said on Wednesday that the government is prepared to take “necessary” action in the market, closely watching whether exchange-rate movements reflect economic fundamentals or are being pushed by speculative behavior. In corporate news, Kioxia Holdings tumbled more than -14% after Bain Capital moved to sell over $2 billion worth of the chipmaker’s shares. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -10.62% to 33.26.

The Japanese October Corporate Services Price Index rose +2.7% y/y, in line with expectations.

The Japanese September Leading Index came in at 108.6, stronger than expectations of 108.0.

Pre-Market U.S. Stock Movers

Autodesk (ADSK) climbed more than +7% in pre-market trading after the design software maker posted upbeat Q3 results and boosted its full-year guidance.

NetApp (NTAP) gained over +5% in pre-market trading after the data infrastructure company reported better-than-expected FQ2 results and lifted its annual profit guidance.

Dell Technologies (DELL) rose over +3% in pre-market trading after the IT and PC giant raised its full-year revenue guidance.

Workday (WDAY) slumped over -6% in pre-market trading as the human resources software provider’s Q3 subscription revenue disappointed investors.

HP Inc. (HPQ) slid more than -4% in pre-market trading after the PC and printer giant issued below-consensus annual profit guidance and said it will cut 4,000 to 6,000 jobs through fiscal 2028 by adopting more AI tools.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - November 26th

Deere & Company (DE), Li Auto (LI), Cheetah Mobile Inc (CMCM), Lee Enterprises (LEE).