S&P 500 and Nasdaq Futures Slide While Tesla Advances Ahead of Fed Meeting

What’s Driving the Market Today?

U.S. stock futures are under pressure Tuesday, with Dow Jones Industrial Average futures falling over 200 points, as investors react to the Dow’s longest losing streak since 2018 and await the Federal Reserve’s interest rate decision. Despite weakness in the Dow, the Nasdaq surged to a record high Monday, led by strength in select tech names.

Dow Futures Slide as Dow Notches Eighth Straight Loss

Dow futures are down 218 points, or 0.4%, while S&P 500 futures are lower by 0.3% and Nasdaq-100 futures are slipping 0.2%. Monday’s session marked the Dow’s eighth consecutive decline, its longest losing streak since June 2018. However, the Nasdaq climbed 1.2% and the S&P 500 edged up 0.4%, supported by gains in major technology and consumer discretionary names.

Despite the broader rally, Nvidia shares remain under pressure, sliding nearly 2% premarket after entering correction territory. The chip giant has dropped over 4% this month. Broadcom, on the other hand, continues to outperform, bolstered by strong AI-driven revenue forecasts.

Tech Stocks and Tesla Drive Market Sentiment

Apple, Alphabet, and Tesla all hit fresh all-time highs Monday, with Tesla advancing further premarket, up nearly 2%. Mizuho upgraded Tesla to “outperform,” citing potential regulatory benefits under a Trump administration, including favorable policies around autonomous driving.

Traders are closely watching the technology and consumer discretionary sectors, which are driving the market’s upward momentum and outperforming other areas.

Fed Rate Decision Looms Large

The Federal Reserve’s two-day policy meeting begins Tuesday, with markets overwhelmingly expecting a 25-basis-point rate cut on Wednesday. CME Group’s FedWatch tool reflects a 95% probability of the move. Beyond the rate cut, traders will analyze Chair Jerome Powell’s post-meeting press conference and updated economic projections for clues about the future rate path and inflation expectations.

Treasury Yields Rise Ahead of Key Economic Data

Treasury yields are ticking higher ahead of the Fed’s decision and key economic data releases. The 10-year yield has risen 3 basis points to 4.43%, while the 2-year yield is up to 4.28%. U.S. retail sales data for November, set to release Tuesday, will provide insights into consumer strength. Housing starts and permits data, due Wednesday, will also be critical in shaping market sentiment.

Market Forecast: Where Could the Market Be Headed Next?

The near-term direction depends on the Fed’s tone and economic data. While a rate cut is largely priced in, any hawkish signals from Powell could introduce volatility. Tech and consumer discretionary stocks remain the market leaders, and further gains are likely if economic data supports a soft landing. The overall outlook remains cautiously bullish, with year-end positioning and Fed clarity serving as potential catalysts for upside momentum.

More Information in our Economic Calendar.