United States equities ended in a mixed fashion on Tuesday (Wednesday AEDT) as traders positioned themselves ahead of the Federal Reserve’s final policy decision of the year.
While, inflation remains above the Fed’s 2% target, market participants are betting that policymakers will maintain the easing trajectory already established in September and October.
The Dow Jones Industrial Average slipped 179 points, or 0.4%, to 47,560.5. The S&P 500 finished 6 points lower at 6,840.5, effectively flat, while the Nasdaq Composite edged up 0.2%.
Pressure on the Dow intensified after JPMorgan shares fell 4.7%, with Consumer and Community Banking CEO Marianne Lake saying the bank expects expenses to rise to roughly US$105 billion in 2026.
Attention now turns to the Fed’s announcement due Wednesday (Thursday AEDT). Fed funds futures indicate an 87.4% probability of a 25-basis-point cut, sharply higher than the sub-67% probability priced in a month earlier, according to the CME Group FedWatch Tool.
Investors will be listening closely for signals on the pace of cuts in early 2026, particularly given the uneven economic backdrop.
One notable beneficiary of the anticipated easing was the Russell 2000, which touched a fresh intraday record during Tuesday’s session.
Smaller companies, whose financing is typically more sensitive to market-based borrowing costs, are seen as prime recipients of support should rates continue to fall.
On the data front, the National Federation of Independent Business Small Business Optimism Index reported that more companies intend to create new jobs in the coming months, a sign of stabilising sentiment among small firms.
Meanwhile, the latest Job Openings and Labor Turnover survey (JOLTs) report showed job openings rose slightly in October after a strong surge in September. Still, hiring remained subdued, and resignations fell to a five-year low.
In corporate news, CVS gained 2.2% after issuing a profit outlook for next year that exceeded market expectations, helping lift sentiment in the healthcare and retail segments.
Campbell Soup shares slipped 5.2% after the company said it had selectively increased prices to offset rising costs, a strategy that weighed on investor confidence.
AutoZone also shed 7.2% after its quarterly results missed forecasts, with earnings per share (EPS) reported at $31.04 versus $32.71 expected, while revenue came in at $4.63 billion versus $4.64 billion expected.
On the bond market, yields continued climbing, with the 10-year Treasury rising 0.4% to fresh three-month highs of 4.186% and the 2-year increasing 1% to 3.613%.
