Investing.com – Market Updates

The Federal Reserve is expected to implement its third consecutive rate cut, and futures are showing a slight increase as Honda and Nissan consider a merger.

1. Fed Set to Deliver Rate Cut

The Federal Reserve’s final policy meeting of the year is underway, with markets anticipating a 25-basis point rate cut. Investors are particularly focused on economic projections and comments from Chair Jerome Powell regarding future rate cuts in 2025. Goldman Sachs predicts the Fed will maintain rates in January, while Standard Chartered expects another cut.

2. Futures Edge Higher

U.S. stock futures rose slightly as investors prepared for the Fed's rate decision. By 03:53 ET, Dow futures were up 69 points (0.1%), S&P 500 futures were up 4 points (0.1%), and Nasdaq 100 futures rose 23 points (0.1%). On Tuesday, major indices closed lower, with Dow experiencing a nine-session decline amid investor caution prior to the Fed's decision. Recent data indicated stronger-than-expected retail sales in November, suggesting solid consumer spending.

3. Oil Prices Rise

Oil prices increased as energy traders awaited the Fed's decision, considering the impact of new sanctions on Russia. By 04:05 ET, WTI futures rose 0.2% to $70.25 per barrel, while Brent rose 0.5% to $73.70. The anticipated interest rate cut could lower borrowing costs and boost oil demand.

4. Honda and Nissan Explore Merger; Foxconn Interested

Foxconn has approached Nissan regarding the acquisition of a controlling stake, aiming to enhance its position in the electric vehicle market. This follows reports of a potential merger between Nissan and Honda, as both face challenges in the EV sector, especially from Chinese competitors.

5. Bitcoin Profit-Taking Ahead of Fed

Bitcoin dropped 3% to $104,046.0 after reaching a new high, as profit-taking occurred before the expected Fed rate cut. The cryptocurrency previously surged to an all-time high of $108,244, fueled by hopes of a more crypto-friendly environment under the incoming administration of President Donald Trump, who proposed a Strategic Bitcoin Reserve.