(Dec 3) : Wall Street staged a cautious rebound, with the S&P 500 stuck in a tight trading range despite a rally in cryptocurrencies that followed a rough start to December. Bonds and the dollar stabilized.
While the US equity benchmark rose for the sixth time in seven sessions, most of its firms dropped. Apple Inc. led gains in megacaps, but Tesla Inc. fell as Michael Burry called the shares “ridiculously overvalued.” Boeing Co. surged 10% as it expects to generate cash again in 2026.
The stock market still requires a bit more broadening out before expecting an immediate push back to fresh highs, according to Mark Newton at Fundstrat Global Advisors.
“I have a constructive view for December, but still believe it is likely to show a ‘back and forth’ type pattern over the next couple of weeks,” he said.
At Piper Sandler, Craig Johnson says more time and technical evidence are needed for a “buy” signal to occur.
Bitcoin topped US$90,000, recovering from a bruising selloff that caught the market off guard and erased nearly US$1 billion in fresh leveraged bets.
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As traders awaited the last few economic reports before next week’s Federal Reserve decision, President Donald Trump said he plans to announce his selection to lead the central bank in early 2026.
The S&P 500 rose to around 6,830. The Nasdaq 100 climbed almost 1%. The yield on 10-year Treasuries was little changed at 4.08%. The dollar wavered.
Anyone looking to bet against US stocks this month would be wise to consider the strength of the American economy and ongoing enthusiasm around artificial intelligence.
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That’s the view at 22V Research, where strategists say an increase in consumer spending and investments in AI are likely to support productivity, allowing firms to deliver the profits needed to power stocks higher.
“Being short here requires high confidence in a much weaker economic backdrop or a significant change in the outlook for AI capex,” according to strategists led by Dennis Debusschere.
While the S&P 500 recently managed to notch its longest monthly winning streak since 2021, the rally from April’s bottom has faced investor concerns around artificial-intelligence valuations and doubts around Fed rate cuts.
After cutting interest rates by more than a percentage point, Fed officials are now wondering where to stop – and finding there’s more disagreement than ever.
In the past year or so, prescriptions for where rates should end up have diverged by the most since at least 2012, when US central bankers started publishing their estimates. That’s feeding into an unusually public split over whether to deliver another cut next week, and what comes after that.
“Nothing is going to change our view that the Fed eases next week, but it is looking more like a hawkish cut,” said Andrew Brenner at NatAlliance Securities. “We can see at least three dissents next week.”
Strategists at JPMorgan Chase & Co. say it’s unlikely that Treasuries will replicate this year’s strong performance in 2026 because markets have priced in too many rate cuts.
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Money markets show traders are pricing in nearly four quarter-point Fed reductions over the next year, including one on Dec. 10.
“If the Fed doesn’t deliver as many cuts, there’s some normalization” in Treasury yields, said Jay Barry, JPMorgan’s head of global rates strategy, at a media briefing. The US economy “bends but doesn’t break,” he added.
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