Stock Index Futures Muted Amid Caution Ahead of Fed Rate Decision

December S&P 500 E-Mini futures (ESZ25) are down -0.01%, and December Nasdaq 100 E-Mini futures (NQZ25) are down -0.05% this morning as investors refrain from making big bets ahead of the Federal Reserve’s final interest rate decision of the year, with all eyes on the central bank’s outlook for interest rates in 2026.

Higher bond yields today are weighing on stock index futures. The 10-year T-note yield rose two basis points to 4.20%, extending its advance as investors grew more cautious about the pace of rate cuts next year.

In yesterday’s trading session, Wall Street’s major indexes ended mixed. AutoZone (AZO) slumped over -7% and was the top percentage loser on the S&P 500 after the company posted weaker-than-expected FQ1 results. Also, JPMorgan Chase (JPM) slid more than -4% and was the top percentage loser on the Dow after its consumer banking chief, Marianne Lake, said firmwide expenses in 2026 would total roughly $105 billion. In addition, Toll Brothers (TOL) fell over -2% after the homebuilder reported weaker-than-expected FQ4 earnings and gave cautious 2026 deliveries guidance. On the bullish side, Ares Management (ARES) climbed more than +7% after S&P Dow Jones Indices announced that the asset manager would be added to the S&P 500 index on December 11th.

A Labor Department report released on Tuesday showed that the U.S. JOLTs job openings rose to a 5-month high of 7.670 million in October, stronger than expectations of 7.140 million. Separately, the Conference Board’s leading economic index for the U.S. fell -0.3% m/m in September, in line with expectations.

“It’s hard to read too much into the JOLTs report – the outperformance in job openings is ostensibly hawkish…, but the pace of layoffs rose too,” according to Vital Knowledge’s Adam Crisafulli.

Today, all eyes are focused on the Federal Reserve’s monetary policy decision. The Federal Open Market Committee is widely expected to deliver a 25 basis point rate cut for a third straight meeting. That would take the Fed funds rate to a range of 3.50% to 3.75%. Market watchers will follow Chair Jerome Powell’s post-policy meeting press conference for clues on next year’s interest rate path. Market participants will also scrutinize the Fed’s quarterly “dot plot” in its Summary of Economic Projections, which will offer guidance on how policymakers expect the interest rate path to unfold over the next few years.

The implied move in the U.S. stock market following the Fed’s decision is just under 1% in either direction, according to data from Strategas Group. A swing of that magnitude would mark the largest post-Fed-Meeting move in the S&P 500 index since March.

“It’s not too much of an exaggeration to say that the rate cut is actually the least important part of this meeting,” said Tom Essaye, founder of The Sevens Report. The market “cares much more that the Fed signals it will continue to cut rates and does not signal a pause in the rate-cut cycle.”

Meanwhile, White House National Economic Council Director Kevin Hassett, the frontrunner in President Trump’s search to replace Mr. Powell, said on Tuesday he believes there is ample room to significantly lower rates, potentially by more than a quarter-point cut. “If the data suggests that we could do it, then — like right now — I think there’s plenty of room to do it,” Hassett said.

On the economic data front, investors will focus on the U.S. Employment Cost Index, which is set to be released in a couple of hours. The ECI was originally scheduled for release on October 31st, but was delayed due to the government shutdown. Economists expect this figure to come in at +0.9% q/q in the third quarter, the same as in the second quarter.

The EIA’s weekly crude oil inventories report will also be released today. Economists expect this figure to be -1.2 million barrels, compared to last week’s value of 0.6 million barrels.

On the earnings front, prominent companies such as Oracle (ORCL), Adobe (ADBE), and Synopsys (SNPS) are set to report their quarterly figures today. Oracle’s results will attract particular attention amid concerns over lofty tech valuations and whether massive AI investments will ultimately deliver returns.

In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.210%, up +0.45%.

The Euro Stoxx 50 Index is down -0.21% this morning, mirroring the cautious mood across global markets as investors wait for the Fed’s final rate decision of the year. Insurance stocks led the declines on Wednesday, with Aegon (AGN.NA) slumping over -8% after announcing it would shift its legal domicile and head office from the Netherlands to the U.S. Industrial stocks also lost ground. Limiting losses, energy and mining stocks advanced. Data released on Wednesday showed that Italy’s monthly industrial production fell more than expected in October, offering fresh evidence of weakness in the country’s long-struggling manufacturing sector. Meanwhile, French lawmakers narrowly passed the 2026 social security budget on Tuesday, giving the government a win but at both political and financial cost. In other corporate news, Delivery Hero SE (DHER.D.DX) rose over +6% after the company told shareholders in a letter that it was reviewing capital allocation plans and assessing strategic options.

Italy’s Industrial Production data was released today.

The Italian October Industrial Production fell -1.0% m/m, weaker than expectations of -0.3% m/m

Asian stock markets today settled in the red. China’s Shanghai Composite Index (SHCOMP) closed down -0.23%, and Japan’s Nikkei 225 Stock Index (NIK) closed down -0.10%.

China’s Shanghai Composite Index closed lower today as investors digested fresh inflation data from the country. Bank and photovoltaic stocks led the declines on Wednesday. However, the benchmark index’s losses were limited as property stocks rallied on expectations of fresh policy support and bets on progress in China Vanke’s debt-restructuring negotiations. Bloomberg News reported on Wednesday that China is weighing new measures to revive its troubled property sector amid growing fears that continued deterioration could pose risks to the country’s financial system. Retail stocks also climbed after Beijing urged prioritizing the industry as a key engine for strengthening domestic demand. Meanwhile, data from the National Bureau of Statistics on Wednesday showed that China’s consumer inflation accelerated in November, helped by a low comparison base, while factory-gate deflation deepened as policymakers continued their push to curb overcapacity. Zavier Wong, market analyst at eToro, said, “China’s latest inflation figures indicate an economy that is warming up on the surface but is still battling deep-seated deflationary pressures underneath.” Investor focus is now squarely on the coming year-end Central Economic Work Conference, where senior officials will outline their policy priorities and discuss key economic targets for 2026. Investors will be watching closely for indications of Beijing’s willingness to continue its state-backed consumer trade-in programs. In corporate news, Moore Threads jumped nearly +17% after announcing plans to launch a new GPU architecture, lifting investor sentiment amid China’s push for tech self-reliance.

The Chinese November CPI fell -0.1% m/m and rose +0.7% y/y, compared to expectations of +0.2% m/m and +0.7% y/y.

The Chinese November PPI fell -2.2% y/y, weaker than expectations of -2.0% y/y.

Japan’s Nikkei 225 Stock Index closed slightly lower today as investors adopted a cautious stance ahead of key central bank decisions at home and abroad. Electronics stocks underperformed on Wednesday. Data released on Wednesday showed that Japan’s wholesale prices rose 2.7% in November from a year earlier, matching the pace recorded the previous month. Meanwhile, short-term Japanese government bond yields climbed to a 17-year high on Wednesday amid growing confidence that the Bank of Japan would raise interest rates at next week’s meeting. Investors are now placing greater emphasis on the timing and extent of future hikes as the central bank targets its so-called terminal rate. BOJ Governor Kazuo Ueda said in a Financial Times interview streamed on Tuesday that the bank will continue to adjust the degree of monetary accommodation gradually “until we get to 2% inflation on a sustained basis and until our policy rate is back to the natural level. Wherever it is.” In other news, Japanese Prime Minister Sanae Takaichi said on Wednesday that currencies should reflect fundamentals and that the government stands ready to take appropriate action against “excessive and disorderly moves” if needed. The yen edged higher on Wednesday following a sharp drop the previous day. In corporate news, Toyota Industries rose over +1% after activist investor Elliott Investment Management disclosed in a regulatory filing that it had built a 5% stake in the company. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -0.07% to 28.02.

The Japanese November PPI rose +2.7% y/y, in line with expectations.

Pre-Market U.S. Stock Movers

Braze (BRZE) surged more than +16% in pre-market trading after the customer engagement platform reported stronger-than-expected Q3 revenue and raised its full-year guidance.

GE Vernova (GEV) climbed over +8% in pre-market trading after the energy company increased its earnings projections and boosted its dividend and share buyback authorization.

PepsiCo (PEP) rose more than +1% in pre-market trading after JPMorgan upgraded the stock to Overweight from Neutral with a price target of $164.

GameStop (GME) slid over -6% in pre-market trading after the videogame retailer posted weaker-than-expected Q3 revenue.

AeroVironment (AVAV) fell more than -4% in pre-market trading after the drone maker reported weaker-than-expected FQ2 adjusted EPS and cut its full-year earnings guidance.

You can see more pre-market stock movers here

Today’s U.S. Earnings Spotlight: Wednesday - December 10th

Oracle (ORCL), Adobe (ADBE), Synopsys (SNPS), Chewy (CHWY), Nordson (NDSN), Uranium Energy (UEC), Vail Resorts (MTN), Planet Labs PBC (PL), Rev Group (REVG), Exzeo (XZO), Photronics (PLAB), Hello Group (MOMO), Daktronics (DAKT), Oxford Industries (OXM), VersaBank (VBNK), J.Jill (JILL), Amtech (ASYS), DLH Holdings (DLHC), AstroNova (ALOT), Culp (CULP).