U.S. stock futures were modestly lower early Wednesday as traders digested a choppy overnight session in global markets and positioned ahead of the Federal Reserve’s final interest‑rate decision of 2025 and a fresh wave of big‑ticket AI and software earnings.
Shortly after 5:30 a.m. ET, E‑mini futures tied to the Dow Jones Industrial Average were down about 0.17%, S&P 500 futures were off 0.15%, and Nasdaq 100 futures were lower by 0.23%, pointing to a softer open on Wall Street. [1]
That follows a mixed close on Tuesday, when the S&P 500 slipped 0.1% to 6,840.51, the Dow fell 0.4% to 47,560.29, and the Nasdaq edged up 0.1% as investors kept risk-taking in check ahead of the Fed. [2]
Futures Move Lower After a Flat Overnight Grind
Futures spent much of the overnight session oscillating around the flat line. Earlier in Asian and early European trading, contracts on the Nasdaq 100, S&P 500 and Dow were briefly higher by roughly 0.1%–0.2% as traders leaned into expectations of a rate cut. [3]
By mid‑morning in Europe, the tone had turned more cautious. U.S. index futures slipped, tracking modest declines in European stocks and a pullback in parts of Asia as investors weighed mixed economic data from China, a sharp move in the Japanese yen, and another powerful rally in silver. [4]
The upshot: pre‑market price action is mildly risk‑off, but far from panic. With the S&P 500 still just shy of its record and the Nasdaq hovering near all‑time highs, even a 0.2% move in futures is better read as positioning than as a major change in narrative. [5]
Fed Day: 25 bp Cut Likely, Path for 2026 in Focus
The main event for markets today is the Federal Reserve’s policy decision and updated economic projections.
Futures markets are pricing roughly a 90% chance that the Fed will cut its benchmark rate by 25 basis points to a range around 3.50%–3.75% at 2 p.m. ET, according to CME FedWatch and LSEG data cited by multiple outlets. [6]
The real question is what policymakers signal about 2026:
- “Dot plot” risk: Analysts note that the Fed’s updated “dot plot” of rate projections could show only one additional cut in 2026—or potentially none—versus market hopes for two cuts. A more hawkish dot plot would force investors to reprice expectations and could derail hopes for a powerful year‑end “Santa rally.” [7]
- Dissent watch: Commentary from strategists suggests at least a couple of Fed voters may dissent if the committee cuts today, complicating Chair Jerome Powell’s message and raising the odds of market volatility during his press conference. [8]
- 2026 cuts “under threat”: Reuters notes that while markets still expect more easing in 2026, a second cut that’s currently priced in is increasingly in doubt amid a global shift to slightly more hawkish central‑bank rhetoric. [9]
Complicating the Fed’s job is a lack of fresh data after a recent government shutdown delayed key releases. The November payrolls report is now due December 16, with inflation data following on December 18—meaning today’s decision will be made with less‑than‑ideal visibility into the economy. [10]
What Happened Yesterday: Quiet Drift, JPMorgan in the Spotlight
Tuesday’s session offered a preview of Fed‑day caution. The S&P 500 slipped 0.1%, the Dow lost 0.4%, and the Nasdaq gained 0.1%, leaving all three indexes within sight of recent record highs but reflecting a lack of conviction. [11]
Key points from Tuesday:
- JPMorgan drag: JPMorgan Chase tumbled about 4.7%—its worst day since April—after the bank projected 2026 expenses of roughly $105 billion, above analyst forecasts. That single move knocked nearly 180 points off the Dow and kept pressure on financials into today’s pre‑market. [12]
- Labor market & yields: A report showing U.S. job openings at 7.7 million, with layoffs ticking up, supported expectations for a Fed cut but also pushed Treasury yields higher, reflecting concern that inflation may not fall as quickly as hoped. [13]
- Santa‑rally debate: With stocks still up strongly for the year—roughly mid‑teens percentage gains for the S&P 500 and more than 20% for the Nasdaq—strategists are divided over whether a Fed cut will ignite a classic late‑December rally or simply add to volatility if the messaging is hawkish. [14]
Overnight Global Backdrop: Asia Softer, Europe Mixed, Yen and Silver Steal the Show
Asia:
Asian markets were mostly lower. A report showing Chinese consumer inflation at its highest level in 21 months, even as producer prices remain in deflation, kept nerves on edge about the quality of China’s recovery. Major regional indexes in Japan and elsewhere in Asia slipped, with investors reluctant to make big bets ahead of the Fed. [15]
Europe:
European equities opened slightly lower to mixed, echoing the cautious tone in futures. Broad European benchmarks dipped around 0.1% as traders waited for the Fed before repositioning for year‑end. [16]
FX and the yen story:
The Japanese yen was one of the big overnight stories:
- The euro climbed to a record high above 182 yen, while the dollar briefly threatened the 157 level before easing back to around 156.6 yen. [17]
- The move appears driven largely by positioning ahead of next week’s Bank of Japan meeting, where markets expect a 25 bp hike—but very little follow‑through tightening beyond that. [18]
Commodities – Silver still the “rocket”:
Silver continues to be the standout asset of 2025:
- Prices cleared the $60 mark and have traded around $61–$61.5 per ounce, an all‑time high. [19]
- The metal has more than doubled this year, helped by dwindling inventories and surging demand from solar power, electric vehicles, data centers and AI infrastructure. [20]
- Gold is consolidating just above $4,200 an ounce, below October’s peak near $4,381, while Brent crude oil has steadied around $62 a barrel after early‑week weakness. [21]
For U.S. equities, the takeaway is that macro cross‑currents—from FX to precious metals—remain intense even as headline volatility in indexes has stayed relatively muted.
Pre‑Market Movers: AI Infrastructure, Banks, Retail and Meme Names
Several individual stocks are already making notable moves before the bell:
AI infrastructure winner: GE Vernova (GEV)
GE Vernova is among the morning’s standout gainers:
- Shares are up more than 8% pre‑market after the company projected significantly higher 2026 revenue and boosted its share buyback program by $4 billion to $10 billion. [22]
- Management also doubled the quarterly dividend to $0.50 per share and guided to strong organic growth in both its power and electrification businesses—16%–18% and 20% respectively in 2026—driven by soaring power demand from data centers and AI applications. [23]
- The company, which was spun off from General Electric in 2024, has already climbed more than 370% since the separation, underlining how investors are willing to pay a premium for pure‑play exposure to grid and power‑equipment demand tied to AI. [24]
GE Vernova’s move reinforces one of 2025’s dominant themes: AI isn’t just about chips and software; it also requires massive investments in electricity, cooling and grid resilience.
Oracle (ORCL) and Broadcom (AVGO): AI bellwethers on deck
AI remains front and center in tech:
- Oracle and Broadcom are fractionally higher in pre‑market trading as investors look ahead to their earnings later this week, which are seen as key barometers for cloud and AI infrastructure spending. [25]
- Options pricing implies potential earnings‑day moves of around ±10% for these names, underlining just how pivotal their guidance on capex and AI‑related demand has become for the broader market. [26]
Banks and consumer names: JPMorgan and Cracker Barrel
- JPMorgan Chase (JPM) is little changed pre‑market after sliding nearly 5% on Tuesday when it flagged higher‑than‑expected expenses for 2026. The stock remains in focus as traders re‑assess big‑bank profitability in a world of moderating but still‑elevated rates. [27]
- Cracker Barrel (CBRL) is down about 8% before the open after the casual‑dining chain cut its annual revenue forecast, a reminder that consumer‑facing companies remain sensitive to any slowdown in discretionary spending. [28]
“Meme” and high‑beta names: GameStop and more
- GameStop (GME) is off roughly 6% pre‑market after reporting weaker‑than‑expected third‑quarter revenue, extending a broader cooling in speculative pockets of the market. [29]
Elsewhere, pre‑market screens show modest gains in PepsiCo (PEP), Palantir (PLTR), Waters (WAT), Pentair (PNR), Carnival (CCL), Warner Bros. Discovery (WBD), Norwegian Cruise Line (NCLH), Micron (MU) and Blackstone (BX)—a cross‑section of defensive staples, AI software, semiconductors, cruise operators and alternative asset managers. [30]
Earnings Calendar: AI, Software and Consumer in Focus
Today’s earnings slate is another key driver of pre‑market positioning:
- Before the open:
- Chewy (CHWY) – Online pet retailer; results will offer a read on e‑commerce demand and consumer behavior in pet spending.
- Uranium Energy Corp (UEC) – A gauge for investor appetite in nuclear‑energy plays. [31]
- After the close:
- Adobe (ADBE) – Critical for understanding corporate software budgets and AI‑driven features in creative and marketing workflows.
- Oracle (ORCL) – One of the most closely watched AI/cloud bellwethers this week, especially its commentary on cloud infrastructure and AI workloads.
- Synopsys (SNPS) – Influential in the semiconductor design ecosystem; its guidance often sets the tone for chip‑design tools and IP.
- Planet Labs (PL) – Provides satellite imagery and analytics, with implications for geospatial data demand. [32]
Looking slightly beyond today, results from Broadcom and other AI‑linked names later this week will help determine whether the AI trade can keep powering indexes higher or whether expectations have finally run ahead of fundamentals. [33]
Bonds, Dollar and Commodities: Macro Cross‑Currents to Watch
The macro backdrop going into the Fed decision looks like this:
- Treasury yields: 10‑year U.S. yields have climbed to around 4.19%, their highest levels in more than two months, as traders reassess how far the Fed can really go in cutting rates given sticky inflation and solid growth. [34]
- U.S. dollar: The dollar index is slightly softer against a broad basket of currencies today but remains strong versus the yen, reflecting the gap between U.S. and Japanese yields. [35]
- Silver and gold: Silver’s explosive rally adds a speculative edge to the commodity complex, while gold’s consolidation near record highs suggests investors still want hedges against both inflation and policy error. [36]
- Oil: Brent crude has stabilized near $62 a barrel after being pressured by news that Iraq restored production at a major oilfield earlier in the week. [37]
If bond yields back off after the Fed—because Powell sounds more dovish than feared—that could support growth and AI‑focused equities in particular. Conversely, a hawkish message that pushes yields even higher would likely weigh most heavily on long‑duration tech and richly valued growth stocks.
What Traders Are Watching Into the Open and Beyond
Heading into the cash session, traders and investors are laser‑focused on a handful of key questions:
- Does the Fed deliver the “cut and calm” scenario?
The market‑friendly outcome would be a 25 bp cut paired with guidance that still leaves room for at least one more reduction next year without aggressively pushing back on 2026 cuts. That could keep the door open for a late‑December rally. [38] - How hawkish is Powell’s tone?
Even if the rate move aligns with expectations, language about inflation risks, labor market strength, and asset prices could swing stocks sharply during and after the press conference. - Do AI and software earnings justify the hype?
With AI‑linked names—from chips to cloud infrastructure to power and grid equipment—priced for perfection, any sign of slowing demand or stretched capex budgets could trigger outsized moves in individual stocks and the broader tech sector. [39] - Can small caps and cyclicals keep up?
The Russell 2000 has recently outperformed and even hit record highs on optimism over lower borrowing costs. Today’s Fed message will help determine whether that rotation away from mega‑cap tech has more room to run. [40]
For now, the message from futures is clear: caution first, conviction later. With the Fed, AI earnings, and a hyper‑sensitive macro backdrop all colliding in the same 48‑hour window, volatility risk for the rest of the week is high.
Bottom Line
- U.S. futures are modestly lower ahead of the Fed’s final decision of 2025, signaling a softer open after a muted Tuesday session. [41]
- Markets overwhelmingly expect a 25 bp cut, but guidance for 2026 and the Fed’s “dot plot” will determine whether investors get a Santa rally—or a year‑end volatility spike instead. [42]
- AI remains the central story, from Oracle, Broadcom, Adobe and Synopsys to power‑infrastructure names like GE Vernova and even the silver market, where AI‑linked industrial demand is a major theme. [43]
As always, this update is for information only and does not constitute investment advice. Traders should consider their own risk tolerance, time horizon, and research before making any decisions—especially on a day when one press conference can reshape the rest of the year.
References
1. www.reuters.com, 2. apnews.com, 3. www.tipranks.com, 4. www.reuters.com, 5. apnews.com, 6. www.reuters.com, 7. www.reuters.com, 8. www.reuters.com, 9. www.reuters.com, 10. www.reuters.com, 11. apnews.com, 12. www.wsj.com, 13. apnews.com, 14. apnews.com, 15. www.nasdaq.com, 16. www.reuters.com, 17. www.reuters.com, 18. www.reuters.com, 19. www.reuters.com, 20. www.reuters.com, 21. www.reuters.com, 22. www.reuters.com, 23. www.reuters.com, 24. www.reuters.com, 25. www.reuters.com, 26. www.reuters.com, 27. www.wsj.com, 28. www.reuters.com, 29. www.reuters.com, 30. www.investing.com, 31. www.tipranks.com, 32. www.tipranks.com, 33. www.reuters.com, 34. www.reuters.com, 35. www.reuters.com, 36. www.reuters.com, 37. www.reuters.com, 38. www.morningstar.com, 39. www.reuters.com, 40. www.reuters.com, 41. www.reuters.com, 42. www.reuters.com, 43. www.reuters.com
