US equity markets moved higher on Tuesday as rising confidence in a potential interest rate reduction supported a rebound in the information technology sector following a volatile start to the month. The S&P 500 and Nasdaq advanced as software and semiconductor names regained momentum, helped by a notable rise in shares of Nvidia and Dell Technologies. The move comes after markets retreated at the beginning of December under pressure from higher Treasury yields and sharp losses in crypto linked equities. Traders increased their expectations for a rate cut at the Federal Reserve’s upcoming meeting, citing a series of data releases indicating a gradual cooling in economic activity. Forecasting tools show that markets now assign a significantly higher probability to a twenty five basis point move, reflecting shifting sentiment among investors and policymakers who continue to assess the strength of the underlying economy. Market participants are also preparing for the release of the Personal Consumption Expenditures Index later this week, which is expected to guide rate expectations ahead of the Fed’s final meeting of the year.
The focus on interest rate dynamics comes at a time when analysts are evaluating how monetary policy will influence risk assets, including digital markets where bitcoin stabilized after registering its largest single session dollar loss since mid 2021. Crypto linked stocks recovered modestly, while broader risk sentiment benefited from improved expectations around growth and spending conditions through early 2026. Corporate updates added to momentum, with Boeing gaining after signaling higher jet deliveries next year and several media companies advancing following reports of acquisition interest. Activity across equity markets remained sensitive to incoming macroeconomic signals as policymakers delivered a range of remarks suggesting differing views on whether current data justify easing. Investors are closely monitoring commentary from Federal Reserve officials as well as the possibility of leadership changes at the central bank, with attention centered on potential successors to the current chair when the term expires next year.
Global growth expectations provided additional context for investor positioning after new assessments indicated that output is holding up better than previously projected across several major economies. Market breadth showed a balanced trading environment, with both advancing and declining issues reflecting the cautious optimism that has shaped sentiment in recent sessions. Geopolitical developments also factored into market monitoring, as US officials prepared for discussions with Russian leadership to explore opportunities for de escalation in Ukraine. Analysts say the combination of monetary policy uncertainty, shifting global growth forecasts and ongoing corporate developments is likely to define near term trading conditions. With investors awaiting key inflation data, market behavior will be influenced by how expectations of rate cuts intersect with broader risk appetite and sector specific drivers. The interplay between macroeconomic trends, corporate performance and digital asset volatility remains central to understanding equity movements heading into the final weeks of the year.
