【Heavyweight】Is the rate cut really coming? The Federal Reserve may take action this month! The US stock market fluctuates, and the job market sounds the alarm.
The expectation of a rate cut is 87% full, and the US stock market is calmly observing. But the consensus on "cooling" is forming, just waiting for the Federal Reserve to make a decision in mid-month!
1. Rate cut expectations rise, US stock market reacts calmly
Last night, the three major US stock indices fluctuated within a narrow range, ultimately mixed. The Dow Jones fell slightly by 0.07%, the S&P 500 rose by 0.11%, and the Nasdaq rose by 0.22%. Chinese concept stocks as a whole rose slightly, with the Nasdaq Golden Dragon Index rising by 0.39%.
The real focus is all on the "rate cut"! High-ranking economic officials in the White House, including Hassett, clearly indicated: The Federal Reserve is very likely to cut rates in the next meeting, by about 25 basis points.
The market is also betting wildly: According to the CME Group FedWatch tool, the probability of the Federal Reserve cutting rates by 25 basis points in December has soared to 87%! By January next year, the cumulative probability of a 50 basis points cut is also 27%.
2. Tech stocks: Some are teaming up, some are turning back
· Nvidia (+2%) collaborates with big data company Palantir (+1%) and Zhongdian Energy to launch a new software platform "Chain Reaction," focusing on AI data center construction challenges.
· Micron Technology (-3%) announced it will gradually exit the consumer storage business, shutting down its Crucial brand, and will focus entirely on AI storage chips. Consumer electronic storage supply may become tighter.
· Meta (+3%) plans to significantly cut its metaverse department budget, possibly by up to 30%.
· Intel plummeted over 7%, as the company decided not to sell its network business division equity, and related negotiations have been terminated.
3. Contradictory signals in the job market: Not hiring, but not really laying off?
Data is conflicting, but all point to "cooling":
· Last week, the number of initial jobless claims was 191,000, hitting a new low in over three years, showing that companies are still trying to retain employees.
· But! In the first 11 months of this year, the cumulative number of layoffs by US companies has exceeded 1.17 million, more than 1.5 times that of the same period last year, reaching a new high since 2020.
· The "small non-farm" ADP data is even more surprising: Private employment positions decreased by 32,000 in November, completely contrary to market expectations for growth.
This state of "not hiring, not laying off" is providing key reasons for the Federal Reserve to cut rates. BlackRock's think tank bluntly states: The cooling of the labor market makes this month's rate cut stable, and there may be further cuts in 2026.
