US Stock Futures Muted After Record Highs; Economic Data Ahead

The U.S. stock market has always been a subject of great interest and speculation. In early Tuesday, following record highs in the previous session, U.S. stock futures showed a muted trend. Dow Jones Industrial Average futures were down by less than 0.1%, while S&P 500 futures were rising by 0.1% and Nasdaq 100 futures were relatively flat.

Stock Market Highlights and Upcoming Challenges

The S&P and Nasdaq Composite achieved new highs on the first trading day of December. However, this week will see these indices tested by a series of economic data releases, with the jobs report on Friday serving as the climax. Callie Cox, chief market strategist at Ritholtz Wealth Management, pointed out that if one believes the strong fall in the stock market was due to economic data meeting relatively low expectations, then one should be somewhat skeptical as we head into winter. Yields indicate that expectations have shifted significantly over the past two months, yet there has been no sustained and clear momentum in economic data.

Stock Futures and Rate Cut Bets

Before the data releases, traders have been increasing their wagers on a December rate cut. According to the CEM FedWatch tool, the probability of a quarter-point reduction stands at 73%, up from 59% a week ago. This shows the market's anticipation of potential monetary policy adjustments.

Impact of Treasury Yields

The benchmark 10-year Treasury note yield stood at 4.217% early on Tuesday, showing a slight increase from the previous day. These yields play a crucial role in the overall market sentiment and can influence investment decisions.

China's Monetary Policy and Liquidity

Elsewhere, on Monday, the People's Bank of China's Governor Pan Gongsheng vowed to further reduce financing costs for companies and households in a speech. The central bank will utilize a variety of monetary policy tools to strengthen countercyclical adjustments and maintain adequate liquidity, as stated in the official readout. This move is expected to have an impact on the global financial markets and economic activities.