S&P500: Fed Outlook, Nvidia Gains, and Rebalancing Themes Shape US Stocks Forecast

Stock futures steady as Nvidia gains on approved China chip sales

U.S. stock futures were little changed on Tuesday as traders evaluated fresh geopolitical news and prepared for the Federal Reserve’s final policy decision of the year.

At 14:00 GMT, Dow Jones Industrial Average futures slipped 0.06% to 47762.00, while S&P 500 futures were down 0.06% at 6851.50. Nasdaq 100 futures fell 0.18% to 25618.75.

Sentiment was supported by a rise in Nvidia after President Donald Trump approved shipments of its H200 chips to “approved customers” in China, with the U.S. government receiving a 25% cut of sales.

Nvidia moved higher following the announcement, which came after CEO Jensen Huang met with Trump last week. The deal provides the company renewed access to a crucial market following months of negotiations.

The update followed a strong Monday session for semiconductor names, with the tech sector the only S&P 500 group finishing in positive territory. Broadcom rallied nearly 3%, while Nvidia and Microsoft added about 2% each, supported by reports that Microsoft may design custom chips with Broadcom.

Poised for a breakout through 6905.00 or breakdown to 50-day moving average?

Traders are weighing two potential setups as E-mini S&P 500 Index futures hold near 6850.00 ahead of the open. Some are looking for strength that could carry prices above last week’s high at 6905.00, while others prefer a pullback toward the 50-day moving average at 6781.40.

A move down to the 50-day could prove useful for longer-term positioning, giving the market room to reinforce support before attempting another push higher. It would also help traders gauge sentiment toward current overbought conditions.

What broader forces pressured the major indexes on Monday

The three major U.S. indexes retreated in the prior session as Treasury yields climbed. The 10-year yield’s continued rise reflected persistent inflation concerns ahead of Wednesday’s Federal Reserve meeting. Traders are pricing an 89% chance of a quarter-point rate cut, up sharply from under 67% a month ago, according to CME’s FedWatch tool.

How are traders positioning for the Fed decision

Market participants expect the Fed to lower its benchmark rate for a third straight meeting, but the updated economic projections and Chair Jerome Powell’s remarks may dictate how stocks perform into year-end.

Analysts highlighted that the Fed is managing several complications, including sticky inflation, delayed economic data due to the government shutdown, and expectations surrounding the next Chair.

Which stocks are moving premarket

Premarket action reflected several notable corporate catalysts. Ares Management surged 8.6% after being added to the S&P 500, replacing Kellanova. CVS gained more than 2% following 2026 profit guidance that topped expectations.

Home Depot slipped over 1% after issuing softer 2026 earnings growth projections. Toll Brothers fell 4% on a quarterly earnings miss, while AeroVironment rose 2% on an $874.26 million Army contract.

Alexander & Baldwin jumped nearly 38% after agreeing to a $2.3 billion take-private deal. Viking advanced 2% on an upgrade, while AutoZone dropped nearly 2% on weaker-than-expected quarterly results.

What is the short-term outlook for traders

With futures stable and catalysts concentrated around the Fed, short-term market direction hinges on Wednesday’s policy tone. A cut paired with reassurance on inflation could support a modest risk-on push, while any hesitation from the Fed may leave indexes under pressure into the final weeks of the year.

More Information in our Economic Calendar.