S&P500: Tech Stocks and Bitcoin Bounce Support US Indices Today as Fed Cut Odds Rise

Stocks Edge Higher as Tech Rebounds and Traders Position for Fed Decision

E-mini S&P 500 futures traded slightly higher on Tuesday, recovering modestly after Monday’s decline. The contract held within yesterday’s range, pointing to investor hesitation as traders assessed short-term direction.

A move above 6864.50 would confirm renewed upside momentum toward 6900.50, while a break of 6802.00 could open room for deeper selling pressure toward the 50-day moving average at 6764.77. The broader correction zone sits near the 6694.75 pivot.

U.S. equities stabilized through the afternoon session, supported by renewed strength in bitcoin and a rebound in major technology names. By 14:39 GMT, the Dow added 0.08%, the S&P 500 gained 0.43%, and the Nasdaq advanced 0.86% as traders attempted to recover from the sluggish start to December.

Is Tech’s Bounce Enough to Restore Confidence?

Bitcoin climbed 3.8%, recovering part of Monday’s slide and helping lift associated growth stocks. AI-linked names strengthened, with Oracle reversing previous losses and Nvidia rising nearly 2%.

The tech sector’s firm showing contrasted with Monday’s weakness, when the Nasdaq’s decline capped a five-day win streak across major indexes. Concerns tied to inflation, stretched valuations, and questions over long-term spending on artificial intelligence have pressured sentiment in recent sessions.

How Are Sectors and Key Stocks Reacting?

Sector performance reflected selective risk appetite. Technology led with a 1.37% gain, while energy, consumer staples, and materials lagged. Industrials posted slight strength, and communication services also gained.

Leading individual performers included Applovin, Boeing, Teradyne, Dell, Oracle, Western Digital, Palantir, and Nvidia.

On the downside, Valero, Zoetis, Procter & Gamble, Marathon Petroleum, and Hershey weighed on sector groups.

The rotation underscored ongoing preference for growth exposure over defensives as traders positioned ahead of key policy events.

Will the Federal Reserve Trigger a Year-End Lift?

Market expectations remain firmly tilted toward a rate cut at the Federal Reserve’s December 10 meeting. CME FedWatch shows traders pricing an 87% probability of a cut, sharply higher than mid-November expectations.

Optimism around seasonal strength also supports risk appetite: December has historically delivered average S&P 500 gains of more than 1% dating back to 1950. Still, concerns linger over whether heavy investment in AI and elevated valuations can sustain recent market strength.

Short-Term Market Forecast

Given improving risk sentiment, sector leadership from technology, and strong expectations for a Fed cut, the short-term outlook leans bullish. However, futures levels at 6864.50 and 6802.00 remain critical for near-term direction as traders weigh policy expectations against valuation concerns.

More Information in our Economic Calendar.