S&P500 and Nasdaq 100: US Stocks Stall in Pre-Market Trade Ahead of Fed Forecast

Futures Stall as Traders Wait for the Fed to Make the Next Move

Stock futures were basically flat early Monday, and you can feel the market pausing after two solid winning weeks. The S&P 500 sits less than 1% off its all-time high, buyers are still showing up on dips, and traders know the next catalyst is the Fed. Rate-cut odds keep climbing, and that alone has kept sentiment tilted positive — but nobody’s swinging big ahead of Wednesday.

Is the Fed Cut Already Baked In?

Traders have spent the past few weeks leaning harder into the idea that the Fed delivers a 25-bp cut this week. Fed funds futures now price roughly a 90% chance, up sharply from about two-thirds a month ago. That soft September core PCE print on Friday helped — a cooler read right before the meeting is exactly the kind of cover the Fed needs. The question isn’t whether the committee cuts. It’s whether Powell sounds confident enough about 2026 to keep this year-end rally alive.

The market wants to believe more easing is coming, but it’s cautious. Last December, Powell struck a tone that doused what could’ve been a stronger rally. Traders haven’t forgotten.

Are Stocks Running Out of Room — or Warming Up for Records?

The indexes have quietly stitched together consistent gains. The Dow and Nasdaq scored back-to-back positive weeks; the S&P 500 added another 0.3% and now sits only a touch from record territory. Even after November’s wobble, dip-buyers came back as shutdown fears faded and AI jitters cooled. With sentiment firming but not euphoric, the market still feels like it wants to push higher — but it needs a green light from the Fed.

Sector-wise, tech continues to be the swing factor. Options markets are pricing a 1.3% move for Wednesday’s session — the biggest implied swing left on the calendar. Traders aren’t positioned for calm.

What’s Happening Beneath the Surface?

Treasury yields are steady, with the 10-year sitting near 4.16% and front-end maturities inching slightly higher. That stability tells you bond traders are already comfortable with a cut. What they want are clues about 2026 — two to four cuts are loosely penciled in across the street. Anything that pushes that path tighter could cool risk appetite quickly.

Carvana grabbed attention after its S&P 500 inclusion news and a fresh price-target bump from Bank of America. Index additions often attract fast flows, and traders aren’t ignoring it.

Bottom Line — What Should Traders Watch Now?

The move on Wednesday won’t hinge on the cut itself. It will hinge on Powell’s tone and the Fed’s projections. If the committee signals confidence in further easing next year, new highs are well within reach. If Powell hems in expectations, even lightly, sellers could show up fast.

The market wants a holiday rally. The Fed will decide whether it gets one.

More Information in our Economic Calendar.