Insights 
VT 
Key Points
- S&P 500 futures rose 0.1%, with the index trading near 6,851, supported by easing bond yields and improved risk sentiment.
- Five-year JGB yield hit 1.38%, its highest since June 2008, as traders bet on a BOJ rate hike, while markets await a Fed rate cut next week.
Global markets regained balance on Wednesday following two volatile sessions that rattled sentiment across risk assets. The S&P 500 edged up 0.13% to 6,851.17, while futures contracts rose 0.1%, mirroring modest gains across global equities.
The rebound comes as traders digested a temporary halt in the global bond selloff and renewed optimism for near-term U.S. monetary easing.
Market calm was restored after the sharp early-week selloff triggered by rising Japanese yields and an unwind in leveraged carry trades.
The episode exposed how fragile positioning remains across global portfolios, especially as the Bank of Japan (BOJ) inches closer to its first rate hike in decades.
U.S. Focus Turns to a Dovish Fed
In the U.S., attention has returned to next week’s Federal Open Market Committee (FOMC) meeting, with markets now fully pricing a December rate cut. Traders expect the policy shift to anchor equity performance into year-end, potentially fuelling a classic “Santa rally.”
The narrative is bolstered by speculation that Kevin Hassett, a known policy dove and White House economic adviser, could succeed Jerome Powell as the next Fed Chair. U.S. President Donald Trump confirmed he would announce his choice early next year.
Analysts warn, however, that Hassett’s close political ties could raise concerns about Fed independence.
Technical Analysis
The S&P 500 is showing fresh signs of strength, trading at 6851 and attempting to reclaim upside momentum after pulling back from its November high at 6928.82.
The index continues to ride above its key moving averages (5, 10, and 30), which remain in a bullish formation. The recent bounce off the 6600–6650 support zone held firm, and price is now pressuring near-term resistance, suggesting a possible breakout setup.
The MACD has crossed back above the signal line with the histogram turning green, confirming a shift in momentum to the upside. However, the index still needs to break and close above the 6928 level to confirm a continuation of the broader uptrend.
If successful, the next leg higher could aim toward 7000 and beyond. Failure to do so may result in another consolidation phase between 6600 and 6900.
For now, the technical picture remains bullish with cautious optimism, supported by improving momentum and solid structure. Traders should monitor for a decisive breakout to confirm trend extension.
Cautious Forecast
With liquidity conditions improving and a Fed cut in sight, the S&P 500 could test the 6,900–7,000 range in December. However, renewed pressure from higher global yields or geopolitical risks could prompt short-term pullbacks toward 6,700 before year-end.
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