Stocks rise as US rate-cut optimism sustains rally: Markets Wrap

by Andre Janse van Vuuren and Kwaku Gyasi

US stock futures climbed as rising expectations for interest-rate cuts helped carry traders’ newfound optimism into the Thanksgiving break. UK assets held steady ahead of Wednesday’s budget.

The S&P 500 was set to extend a three-day, 3.5% rally marked by broad sector gains. The US benchmark also found technical support by reclaiming its 50-day moving average. Alphabet Inc. rose 1.9% in premarket trading after three consecutive all-time highs. Nvidia Corp. headed for a second daily loss. 

Equities are regaining momentum after early-November jitters over stretched artificial-intelligence valuations prompted a severe pullback. Sentiment has since improved as dovish remarks by Federal Reserve officials revived bets on a December rate cut.

Those expectations strengthened after it emerged that White House National Economic Council Director Kevin Hassett is the leading contender for the next Fed chair — a choice investors see aligning with President Donald Trump’s push for lower rates.

Money markets now price an 80% chance of a Fed quarter-point cut next month and favor three more by end-2026. A week ago, traders expected only three cuts in total.

“The fact we’ve seen such a quick rally after that pullback just tells you that there’s still quite a lot of underlying demand,” said Daniel Murray, deputy chief investment officer at EFG Asset Management.

The dollar and US Treasuries were little changed. Gold rose while Bitcoin fell below $87,000.

Traders will also watch UK Chancellor Rachel Reeves’ high-stakes second budget. She faces the dual challenge of reassuring MPs who have put Prime Minister Keir Starmer on notice, while convincing gilt investors demanding a premium over US, Germany, and Japanese debt.

“Reeves will need to deliver a convincing plan,” wrote Fawad Razaqzada, market analyst at City Index. “If she doesn’t, UK assets could face a rough ride.” For now, “gilts have been volatile, and the pound has drifted sideways as traders weigh up the government’s fiscal credibility.”

What Bloomberg strategists say...

“Gilts’ reaction to the fraught UK budget could take place in several phases that last well beyond Chancellor Rachel Reeves’ remarks. Today, the outcome will largely depend on some combination of the amount of Reeves’ fiscal headroom, the front-loaded nature of fiscal tightening, viability of revenue-raising measures, the expected hit to growth and inflation via OBR forecasts and any impact on BOE rate-cut bets.”

— Adam Linton, macro strategist/squawker. For full analysis, click here.

Corporate News:

• Dell Technologies Inc.’s shares gained in premarket trading as the firm raised its annual projections for the key artificial intelligence server market.
• Robinhood Markets Inc. and Susquehanna International Group are taking over a regulated exchange that was tied to the now-defunct crypto business FTX
• The US government said Tuesday it negotiated a 71% discount off of the list price of Novo Nordisk A/S’s blockbuster drugs Ozempic and Wegovy for patients in Medicare.
• HP Inc. gave a profit outlook for the current year that fell short of estimates and the company said it will cut 4,000 to 6,000 employees through fiscal 2028 by using more AI tools.

Some of the main moves in markets:

Stocks

• The Stoxx Europe 600 rose 0.4% as of 10:20 a.m. London time
• S&P 500 futures rose 0.3%
• Nasdaq 100 futures rose 0.4%
• Futures on the Dow Jones Industrial Average rose 0.2%
• The MSCI Asia Pacific Index rose 1.4%
• The MSCI Emerging Markets Index rose 1.1%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro was little changed at $1.1576
• The Japanese yen fell 0.2% to 156.40 per dollar
• The offshore yuan was little changed at 7.0759 per dollar
• The British pound was little changed at $1.3171

Cryptocurrencies

• Bitcoin fell 0.2% to $86,839.32
• Ether fell 0.7% to $2,910.32

Bonds

• The yield on 10-year Treasuries was little changed at 4.00%
• Germany’s 10-year yield was little changed at 2.68%
• Britain’s 10-year yield was little changed at 4.50%

Commodities

• Brent crude fell 0.3% to $62.29 a barrel
• Spot gold rose 0.8% to $4,161.79 an ounce

This story was produced with the assistance of Bloomberg Automation.

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