Economic Indicators
During Tuesday’s European session, Dow Jones futures fell slightly by 0.06%, while S&P 500 and Nasdaq 100 futures dropped 0.09% and 0.12%, respectively. US markets will close early on Wednesday and remain closed on Thursday for Christmas.
In Monday’s session, the Dow Jones rose 0.47%, the S&P 500 by 0.64%, and the Nasdaq 100 increased 0.52%. Nvidia’s advance came amid reports of shipping AI chips to China, while Oracle and Micron Technology also saw gains. Energy stocks rose due to oil supply concerns linked to US actions involving Venezuela.
Interest in the Federal Reserve’s potential easing policy grows amid market sentiment. Dow Jones Industrial Average, an index of 30 major US stocks, is price-weighted and influenced by company performance, economic data, and interest rates.
We’re seeing markets pause today, December 23rd, as everyone waits for the Q3 GDP numbers. With the Christmas holiday shortening the week, trading volumes are naturally thin. This lack of liquidity means any surprise in the data could cause a sharp, outsized move in either direction.
Low Volatility Environment
The key number is the 3.2% GDP growth expectation, a noticeable slowdown from the 3.8% we saw in the second quarter. This cooling is what the Fed wants to see, and a number in this range would likely support the case for further easing in early 2026. We remember the surprisingly strong growth back in late 2023, which was revised up to 5.2%, so this gradual moderation confirms the soft-landing narrative that has fueled this year’s rally.
The overall sentiment remains bullish, largely because the Federal Reserve is on our side. Governor Miran’s recent comments about needing to ease policy to avoid a recession reinforce the view that the Fed will act to support the market. This is a continuation of the dovish pivot we first saw back at the end of 2023, which kicked off the rate cuts that defined 2024 and 2025.
