Stock Market Today: Stocks edge lower with Fed Chair Powell's speech in focus

Investors are heading into the final month of the year on solid footing, with an 18.5% gain for the S&P 500 and the strongest monthly rally for U.S. Treasuries since the global financial crisis.

Dec 1, 2023 - 19:30

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Stock Market Today: Stocks edge lower with Fed Chair Powell's speech in focus

Check back for live updates throughout the trading day.

U.S. equity futures slipped lower Friday, while the dollar inched higher on foreign exchange markets and Treasury yields steadied, as investors kicked off the first day of December trading focused on economic-activity data and a key speech from Federal Reserve Chairman Jerome Powell.

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Trial and error

Pfizer (PFE) - Get Free Report shares are a notable early-market mover, falling more than 4% after the drugmaker pulled a study of its developing obesity treatment following adverse reactions from patients in a phase II trial.

Stock Market Today

Stocks last month booked their best monthly gain since July 2022, with the S&P 500 rising 8.51% on the back of a sharp pullback in Treasury bond yields, by some measures the strongest in two decades. Also helping: muted economic data that have built the case for an end to the Fed's 18-month interest-rate-hike cycle.

Bets on a spring rate cut, in fact, have moved forward to as early as March, with the odds of a 0.25-percentage-point reduction in the federal funds rate, currently set at between 5.25% and 5.5%, pegged at just under 47%.

Powell may opt to push against that optimism when he speaks later this morning at Spellman College in Atlanta. He might echo comments from some of his senior colleagues that he would need to see a longer stretch of benign inflation data, as well as rising unemployment, to justify an early-2024 rate cut.

Markets await manufacturing data

Benchmark 10-year-note yields, which fell nearly 60 basis points (0.6 percentage point) over the month of November, were little changed at 4.336% in early New York trading. Two-year notes held at 4.677% ahead of Powell's speech, and before two readings of November manufacturing activity coming just after the opening bell.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.03% higher in early trading at 103.528, following on from its 3.07% decline in November.

Global oil prices were mixed, with WTI crude trading modestly higher following yesterday's virtual OPEC summit. In that meeting cartel members failed to agree on a unified production cut but vowed to voluntarily reduce output over the coming months, led by Saudi Arabia, to bring crude markets back in balance.

Brent contracts for February delivery, the global pricing benchmark, slipped 7 cents in early New York trading to change hands at $80.81 per barrel while WTI contracts for December were up 2 cents at $75.95 per barrel.

On Wall Street, stocks are set for a muted start to the session, with Powell's Atlanta speech in key focus. Contracts tied to the S&P 500 suggest an 8 point opening bell dip and those linked to the Dow Jones Industrial Average, which closed at a 10-month high, are priced for a 18 point bump.

The tech-focused Nasdaq, meanwhile, is looking at a 40 point decline, with Tesla (TSLA) - Get Free Report slipping 1.34% following last night's pricing of its newly launched Cybertruck.

In European markets the Stoxx 600 rose 0.39% in early Frankfurt trading following data showing manufacturing activity data for last month remained firmly in contraction. That built investor bets that the European Central Bank will begin lowering its own policy rate as early as next spring.

Overnight in Asia, the regionwide MSCI ex-Japan index was marked 0.62% lower, paced by another day of declines for stocks in China. And Japan's Nikkei 225 ended a muted Friday session 0.17% lower at 33,431.51 points.