Headline: Choppy Markets Test Seasonal Rally as Fed Doubts Mount Ahead of Nvidia
Introduction: U.S. equities have lost their steady “buy-the-dip” rhythm, with volatility creeping back in as investors brace for Nvidia’s earnings and reassess Federal Reserve rate-cut expectations. After months of momentum-driven gains, the market’s recent fits and starts hint at fading confidence during what is typically a supportive seasonal window.
Since late October, intraday swings and uneven momentum have replaced the earlier pattern where tariff headlines or political shocks triggered brief dips before buyers quickly stepped in. The near-term spotlight is on Nvidia and the hyperscaler spending cycle—key drivers for mega-cap tech and broader risk appetite. That event risk is intersecting with a hawkish shift in rate expectations, dampening the prospect of an effortless year-end rally.
The recalibration began after Chair Jerome Powell’s late-October remarks suggested a December rate cut was far from assured. Markets initially looked past that signal, but pricing has since moved closer to reality, with the odds of a December cut dropping to roughly one-third. Even so, the so‑called Fed put remains intact: policymakers still have substantial room—roughly 375 basis points—to ease if the labor market softens, while a renewed inflation surge does not appear imminent, even if price pressures remain stubborn.
Technically, the tape doesn’t look great. A break of a cluster of recent lows in the 6,550–6,631 area would undercut confidence in the seasonal rally narrative and invite further de-risking. With mega-cap earnings, labor data, and inflation readings on deck, the next few sessions will likely determine whether equities can reassert momentum or slip into a deeper consolidation.
Key Points: – Market momentum has turned inconsistent since late October, replacing the prior buy-the-dip pattern. – Nvidia earnings and hyperscaler capex outlook are pivotal near-term catalysts for tech and broader risk sentiment. – Powell’s comments cooled hopes for a December rate cut; market-implied odds have fallen to about one-third. – The Fed still has meaningful easing capacity if the jobs market weakens; inflation looks sticky but not reaccelerating. – A break below the 6,550–6,631 support zone would challenge the seasonal rally setup and could spur further selling.
