US stock futures traded cautiously on Monday evening following a weak close on Wall Street, as investors continued reassessing the economic landscape after disappointing manufacturing data, alongside rising bets on interest rate cuts and increasing uncertainty over the Federal Reserve’s leadership. Slight gains in S&P 500 and Nasdaq 100 futures were offset by stability in Dow Jones contracts, reflecting a wait and see sentiment rather than a clear risk on direction.
The Institute for Supply Management (ISM) data confirmed ongoing pressures on the industrial economy, with the manufacturing index dropping to 48.2 for the ninth consecutive month, below the 50 mark that separates expansion from contraction. New orders, employment, and backlogs all declined, signaling weak industrial demand and challenges in regaining momentum before year end. This slowdown bolstered market expectations that the Fed might cut rates at the December 9–10 meeting, with futures pricing in an approximately 86% probability of a 25 basis point cut, driven by soft economic data, easing inflationary pressures, and comments from Fed officials suggesting a more flexible policy stance.
The US dollar saw limited weakness at the start of the week as investors reassessed monetary policy ahead of the upcoming Fed meeting. Recent weak economic data reinforced the market view that growth is slowing and inflationary pressures are less pronounced, reflected in short term money market instruments now pricing an 88% chance of a 25 basis point cut at the December 9–10 meeting, compared with around 40% just a week ago. This rapid shift highlights a clear change in market expectations regarding the direction of US interest rates.
Meanwhile, anticipation over the Fed’s leadership intensified after President Donald Trump announced he had made a decision on Jerome Powell’s successor without revealing the name. Reports indicate a shortlist including Kevin Hassett, Kevin Warsh, and Christopher Waller, with Hassett considered the frontrunner despite downplaying such speculation. Any change at the top of the Fed could have a significant impact on monetary policy direction, particularly as Trump is believed to favor a more dovish candidate aligned with his repeated calls for swift and aggressive rate cuts. Such a move, if realized, could provide additional support to interest rate sensitive assets, particularly growth stocks and the retail sector.
On another front, cryptocurrency related stocks faced heavy pressure following a sharp drop in Bitcoin, which broke below $85,000 and fell more than 7% in a single day. The decline triggered widespread selling in digital asset linked companies: MicroStrategy fell up to 12%, Coinbase dropped around 5%, and Robinhood slid more than 4%. Mining firms like Marathon Digital and Riot Platforms also saw declines of 7–9% due to margin pressures from falling prices. The move reflects a rapid shift in risk appetite and confirms that the market remains highly sensitive to liquidity shocks and digital asset price fluctuations.
Stay informed about global markets through our previous analyses. and Now, you can also benefit from LDN company services via the LDN Global Markets trading platform.
