Stocks Rebound as Risk Aversion Eases Ahead of Key Fed Decision – Europe Market Wrap

Stocks regained their footing as the recent flight from risk began to reverse, helped by Bitcoin’s bounce off its lows. S&P 500 futures added 0.3%, hinting at a return to last week’s upswing after Monday’s drop briefly broke the market’s momentum. European and Asian equities also joined the recovery, and Nasdaq 100 futures climbed 0.4%.

Bitcoin, which tumbled more than 5% on Monday, stabilized. Bond markets firmed as strong demand at Japan’s latest 10-year auction helped settle nerves following renewed chatter about potential Bank of Japan tightening. The dollar traded in a tight range.

The turn higher comes after a wobbly start to a month that usually favors equities. With sentiment still fragile, the market’s next catalyst lies squarely with the Federal Reserve. Investors broadly expect a rate cut next week, treating it as the base case after a run of softer economic readings and more cautious language from policymakers.

After a turbulent November marked by renewed worries over elevated valuations, traders are looking for direction. Major equity gauges remain close to record highs, but enthusiasm for the riskier ends of the market has cooled noticeably. The Fed’s decision now represents the key swing factor: a miss on expectations could jar equities, but conviction in an impending cut remains strong.