The S&P 500 shattered records again, closing above 6,000 for only the second time in its history. Tuesday’s session saw the index achieve both intraday and closing highs, fueled by market momentum and a resilient economic backdrop.
The Dow Jones Industrial Average joined the rally, hitting its own new highs. With this achievement, the markets are writing a new chapter, but traders aren’t celebrating too loudly yet. There’s a lot riding on the data dropping today.
Wall Street futures showed little action early Wednesday. Futures tied to the Dow inched up 25 points, barely making a dent, while S&P 500 and Nasdaq-100 futures slid 0.1% and 0.2%, respectively. The sluggish movement reflects growing caution in outlooks.
Markets brace for inflation data and Fed decisions
Investors are glued to the Federal Reserve’s next moves, with today’s release of the Personal Consumption Expenditures (PCE) price index expected to provide critical insights. Scheduled for 10 a.m. ET, the PCE is the Fed’s favored measure of inflation.
Economists surveyed by Dow Jones anticipate a core PCE year-over-year increase of 2.8%, excluding volatile food and energy prices. A higher or lower figure could stir speculation about how aggressive—or cautious—the Fed will be at its December meeting.
This anticipation follows Tuesday’s release of minutes from the Fed’s November meeting. Officials hinted at further rate cuts but emphasized a slow, calculated approach.
It’s not just inflation data on the radar today. Reports on personal income and consumer spending for October, also dropping at 10 a.m. ET, are expected to provide more context for the health of the U.S. economy.
The timing couldn’t be better—or worse—given the shortened Thanksgiving trading week. Markets will close on Thursday and shut early Friday, meaning any big surprises in today’s numbers could hit with exaggerated force due to light trading volumes.
Is the rally still on?
While traders focus on short-term movements, economists are looking further ahead. They believe the tariffs proposed by President-elect Trump could weigh more heavily on growth than any potential tax adjustments.
And the Tax Cuts and Jobs Act, often touted as a driver of economic activity, might not deliver the long-term impact some expect. If the tax cuts expire, the economy could lose up to 1% in growth. If they remain in place, the impact would essentially be neutral—no extra drag, but no meaningful boost either.
Meanwhile, the U.S. economy remains strong, at least for now. Economists expect 2025 growth to hover around 2%, a slight dip from the Atlanta Fed’s GDPNow estimate of 2.6% for the fourth quarter.
But with tariffs hanging in the balance, the forecast for 2025 could change dramatically depending on how much of Trump’s trade agenda comes to fruition.
While Wall Street was breaking records, crypto markets were in flux. Bitcoin, which has comfortably held above $93,000, took a hit as MicroStrategy’s $5.4 million BTC purchase at $97,862 per coin went underwater. The company’s stock fell 35%, but support at its 20-day EMA gave traders hope, with shares stabilizing above $350.
Meanwhile, Ethereum came roaring back. ETH gained over 4% as Bitcoin slipped 1.5%, with the ETH/BTC pair surging 13% from its post-election low of 0.0318 to 0.0366. Ethereum outperformed the broader CoinDesk 20 Index, which rose just 0.5%, showing a change in investor preference toward ETH.
From Zero to Web3 Pro: Your 90-Day Career Launch Plan
