Stocks steady as focus turns to Fed rate cuts

Wall Street stocks hit pause at the start of a holiday-shortened week, holding steady after notching their third straight week of wins as hopes for a retreat in US interest-rate hikes persisted.

Futures tied to the S&P 500 (^GSPC) and the Dow Jones Industrial Average (^DJI) hovered just above the flatline, while those on the tech-heavy Nasdaq 100 (^NDX) were up roughly 0.2%.

Stocks have stayed aloft as signs of cooler inflation encouraged the market to believe the Federal Reserve is finally done with raising rates. Now the focus is on when a rate cut could come, with traders pricing in a 30% chance of that happening as soon as March.

Tuesday’s release of minutes from the Fed’s last meeting could provide fodder for that debate. But with little on the economic docket and the Thanksgiving closure on Thursday ahead, trading could stay muted.

Eyes will be on Nvidia’s financial results, also due Tuesday, after the chipmaker’s last earnings report sent stocks broadly roaring higher as the AI hype cycle kicked in.

The AI effect was still in play Monday, as Microsoft shares rose almost 2% in pre-market trading after the OpenAI backer hired Sam Altman to lead a new AI research team. Weekend efforts to reinstate Altman as ChatGPT maker’s CEO after his surprise ouster came to nothing, and the company’s board named former Twitch chief Emmett Shear to replace him.

In commodities, oil prices rose amid reports that Saudi Arabia and its allies could announce a further cut in production when OPEC+ meets at the weekend. Also seen as lifting prices was a slide in the dollar, which cuts costs for holders of other currencies. West Texas Intermediate crude (CL=F) and Brent crude (BZ=F) both moved up about 1.6%.