Stocks Waver as Markets Mull Future Fed Policy – US Market Wrap

Stocks fluctuated as traders considered the possibility of a slower rate cut from the Federal Reserve. Treasury 10-year yields hovered around 4.2%.

Wall Street is reducing bets on aggressive policy easing as the US economy remains strong, while Fed officials sound cautious about the pace of future rate cuts. Rising oil prices and the prospect of larger fiscal deficits following the upcoming presidential election have only exacerbated the market’s concerns. Since the end of last week, traders have reduced the expected size of Fed cuts through September 2025 by more than 10 basis points.

According to Citigroup strategists, exposure to the S&P 500 has reached levels that have previously resulted in a 10% drop. Long positions on benchmark index futures have reached their highest level since mid-2023, and they appear “particularly extended,” according to the team led by Chris Montagu.

The S&P 500 remained relatively unchanged. The Nasdaq 100 gained 0.1%. The Dow Jones Industrial Average showed little change. Texas Instruments issued a disappointing fourth-quarter revenue forecast late last night.
Treasury 10-year yields were little changed, at 4.20%. The euro fell to its lowest level since early August, amid expectations that the European Central Bank will continue to lower interest rates. Options traders are increasing their bets that Bitcoin will hit $80,000 by the end of November, regardless of who wins the US election.