Rate Cut Lands: How Will Market Move Tonight? How Many Cuts Are Expected in 2026?

Tiger_comments
12-10
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Global markets are holding their breath ahead of the Federal Reserve’s policy decision to be released on Wednesday.

CME FedWatch tool is pricing in nearly 89.4% probability of a rate cut, yet what investors worry about more is whether the Fed will deliver hawkish signals alongside the cut, which could dampen expectations for a sustained easing cycle.

At the upcoming meeting early Thursday morning, Powell’s remarks and the dot plot will be the key focus. His comments will set the tone for the next two meetings.

  • If the message leans dovish, inflation expectations may strengthen further, and equity indices as well as gold and silver could continue to move higher in the short term.

  • If he sounds more hawkish, that would align with current expectations in the bond market, meaning market reactions may be muted. This could spark a modest pullback in equities and precious metals — but such a pullback may present buy opportunities.

Some anticipate that the market may move like this tonight:

Even though a rate cut is widely expected, investors are looking beyond the immediate 25-basis-point move and focusing instead on the post-meeting statement and guidance on the future policy path.

Goldman Sachs forecasts that five FOMC participants will register a “soft dissent” against this week’s expected 25 bps cut, projecting a 2025 median dot-plot rate of 3.875%, implying fewer total cuts than the committee’s median projection.

How will the market move tonight?

Will we see a gap-up then pullback, or a gap-up and follow-through?

And how should we interpret the 2026 rate-cut dots?

Leave your comments to win tiger coins!

Another Crash Friday! Classice Bounce This Week?
U.S. tech stocks plunged, with AI-related names seeing a broad sell-off as capital rotated into defensive sectors. Weakness in the S&P 500 and Nasdaq was largely driven by a sharp drop in Broadcom, whose shares tumbled 11.4% on the day. Despite beating earnings expectations, investors were disappointed by lower-than-expected AI margins and the lack of AI guidance for fiscal 2026, weighing heavily on the stock. After Friday’s sell-off, will the market stage a strong rebound this week?
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Comments

  • Shyon
    12-10
    Shyon
    From my perspective, tonight’s move will hinge less on the 25 bps cut and more on Powell’s tone. A slightly dovish message could spark a quick gap-up in equities and precious metals, though I still expect an early fade as markets digest the details. Positioning is elevated, so any pop may be short-lived.

    If Powell sounds hawkish, the reaction may actually be muted since the bond market already expects it. Any dip in stocks or metals would likely be modest, and I’d view that kind of pullback as a potential buying window, especially with easing still on the table for 2025.

    For the 2026 dots, I’d see them as guidance on the Fed’s long-run comfort zone, not a strict plan. Fewer cuts into 2026 would simply signal caution during a soft-landing phase, meaning more near-term volatility but still a constructive medium-term outlook.

    @Tiger_comments @TigerStars

  • icycrystal
    12-11
    icycrystal
    @rL @Universe宇宙 @GoodLife99 @Zarkness @HelenJanet @Aqa @SPACE ROCKET @nomadic_m @Barcode @Shyon @LMSunshine @koolgal @HelenJanet

    How will the market move tonight?


    Will we see a gap-up then pullback, or a gap-up and follow-through?


    And how should we interpret the 2026 rate-cut dots?


    Leave your comments to win tiger coins!

  • icycrystal
    12-11
    icycrystal
    how will market move [Thinking] [Thinking] [Thinking] not sure... as anything can happen... [Blush] [Blush] [Blush]

    better to keep [USD] [USD] [USD] and when downtrend, time to go shopping [Evil] [Evil] [Evil]

    • koolgal: 
      Appreciate your valuable insights 🥰🥰🥰
  • koolgal
    12-11
    koolgal
    🌟🌟🌟Wall Street roared in approval today after Federal Reserve Chair Jerome Powell announced an anticipated 25 basis point rate cut. 

    More importantly Jerome Powell adopted a less hawkish tone than feared.  This perceived doveness unleased a massive relief rally across major stock indices.

    Investors rotated into risk assets, driven by hopes for easier financial conditions ahead and a clear "wait and see" approach from the Fed that calmed fears of overly restrictive monetary policy.

    Hooray for Jerome Powell!   He is like Santa Claus sending cheer to the markets.  🥰🍀🥰🎅🎅🎅🌈🌈🌈💰💰💰🎁🎁🎁

    @Tiger_comments @TigerStars @Tiger_SG @TigerClub @CaptainTiger

  • JC888
    12-10
    JC888
    US market should have factored in the cut already. What remains to affect market sentiments will be Fed chair Powell's post meeting conference.  A hawkish tone will set market reeling and vice versa. Its latest inflation & jobs reports out next week, that will be the litmus test for US market.
  • Star in the Sky
    12-11
    Star in the Sky
    I predict 2 more cuts in 2026... Uncertainty and the economy will get worse in 2026 2H... If this really happened, expecting per cut will be 0.5% half yearly in 2026.
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