Fed cut odds reshaped markets

December 4, 2025 at 21:00 UTC

5 min read

Fed Funds Futures and equities charts reacting to Reuters poll on 25bp Fed rate cut expectations

Key Points

A Reuters poll showing 82% of economists expected a 25bp Fed cut has lifted futures-implied easing odds and altered positioning across rates and equities.
Mixed labor signals, including social-media reports of initial jobless claims at a three-year low, and high-importance calendar items have kept investors cautious ahead of the FOMC.
Snowflake's quarterly beat followed by softer Q4 product-revenue guidance triggered an after-hours selloff and increased stock-specific volatility.
Sector flows favored Communication Services, Industrials and Technology while Healthcare, Materials and Consumer Staples lagged; RGC, PATH and ASTS led notable gains.

Global Market Summary

US benchmarks were largely flat as markets positioned ahead of the Fed: the S&P 500 (SPX) slipped 0.09%, the Dow (DJIA) fell 0.23% and the Nasdaq (^IXIC) inched up 0.03%. European indices gained, led by Germany's DAX (DAX) +0.79% with France's CAC (FRA40) +0.43% and the FTSE (UKX) +0.19%, while in Asia Japan's Nikkei (NKY) rallied 2.33% and Hong Kong's Hang Seng (HSI) rose 0.68% as Shanghai (000001.SS) was little changed (-0.06%).

Top Movers

Communication Services led sector gains with XLC (+0.43%), followed by Industrials (XLI +0.36%) and Technology (VGT +0.29%). Healthcare was weakest as XLV (-0.98%), Materials (XLB -0.67%) and Consumer Staples (XLP -0.63%) lagged. Notable stocks included RGC (+25.67%), PATH (+25.04%) and ASTS (+18.86%) among gainers while SNOW (-11.20%) and SYM (-17.93%) led decliners.

Macro highlights

A Reuters poll published Dec. 4 showed 82% of economists expect a 25bp Fed cut at the Dec. 9-10 meeting, which lifted futures-implied odds of easing and influenced positioning in rates and equities. Mixed labor signals—including social-media reports of initial jobless claims at a three-year low—and high-importance calendar items (Canada Ivey PMI, Australia balance of trade) kept investors cautious ahead of the FOMC.

News that moved markets

Snowflake (SNOW) reported a quarterly beat but issued softer Q4 product-revenue guidance, prompting an after-hours selloff and elevated volatility in the name. Dollar General (DG) beat Q3 expectations, raised full-year EPS guidance and announced a store expansion program, which pushed the stock higher in premarket trading. Social-media posts about falling jobless claims and strong Black Friday sales added to mixed sentiment and increased sensitivity to Fed guidance. Amynta Group completed its acquisition of International Sureties, and Anthony Pompliano with ProCap BTC and Columbus Circle Capital Corp I implemented a Moonshot earnout and compensation structure following their business-combination closing. Several announced transactions were reported, led by Brag House's proposed merger valuation with House of Doge (~$1.09 billion) and a series of smaller acquisitions including Findem/Getro, Lumine/Synchronoss, TELEO/Sharpen (Ytel), BairesDev/Modal, Lightbeam/Syntax, ZenaTech's expansion to Australia and Hightekers/Serviap Global.

Upcoming session watchlist

CA Unemployment Rate (NOV) — consensus 7% vs 6.9% prior, Dec 05, 01:30 PM | Gauges labor market slack and potential wage pressure in Canada.
US Michigan Consumer Sentiment Prel (DEC) — consensus 52 vs 51.0 prior, Dec 05, 03:00 PM | Tracks household confidence, informing near-term consumer spending and growth momentum.
US Personal Income MoM (SEP) — consensus 0.4% vs 0.4% prior, Dec 05, 03:00 PM | Signals income growth that supports consumption and overall demand strength.
US Core PCE Price Index MoM (SEP) — consensus 0.2% vs 0.2% prior, Dec 05, 03:00 PM | Tracks underlying inflation trend and near-term price pressures.

Key Takeaways

U.S. benchmarks were largely flat as markets positioned for Fed guidance and mixed macro signals, resulting in only modest index moves on the session.
European indices gained, led by Germany's DAX (DAX), while Asian markets diverged with Japan's Nikkei (NKY) rallying and Hong Kong's Hang Seng (HSI) rising modestly.
Earnings-linked moves drove volatility: Snowflake sold off after softer Q4 product-revenue guidance despite a quarterly beat, while Dollar General rose after a Q3 beat and EPS guidance raise.
Notable individual movers included RGC, PATH and ASTS among gainers, while SNOW and SYM led decliners and drove elevated name-specific volatility.