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Williams Hints Dec Rate Cut; Stocks Rally but Weekly Under Pressure
Stocks
Summary:
Friday's rally reflected traders' pricing-in of NY Fed president Williams' hint at a December rate cut. The recent equity pullback is a healthy consolidation. Use it to initiate longs and watch early-December price action for either a resumption of the up-trend or a structural break.
Buy
PENDINGUS30
EXP
45700.00
Entry Price
49579.00
TP
44900.00
SL
46451.92 -64.53 -0.14%
--
Point
PENDING
44900.00
SL
CLOSING
45700.00
Entry Price
49579.00
TP
Fundamentals
Following Thursday's sharp sell-off, the major equity indices staged a powerful relief rally on Friday.
All of the bellwether averages, however, retreated sharply from their intraday highs into the close. The Dow Jones Industrial Average (DJIA) advanced 493 points, or 1.1%, to 46,245. The Nasdaq Composite Index gained 195 points, or 0.9%, to 22,273. The S&P 500 Index rose 64 points, or 1.0%, to 6,602.
Despite the session's rebound, the headline indices posted steep weekly losses: the Nasdaq tumbled 2.7%, the S&P 500 shed 2.0%, and the Dow slipped 1.9%, leaving the weekly technical picture still fragile.
Wall Street's robust showing appeared partly driven by renewed dovish repricing around the Fed's December FOMC meeting, with investors growing more confident that the FOMC will deliver another rate cut. Expectations for a reduction next month were further buoyed after New York Fed President John Williams struck a distinctly dovish tone in his latest remarks.
At the centennial conference of the Central Bank of Chile, Williams stated that monetary policy is "modestly restrictive" and that he sees "room for further adjustments" in the policy rate in the near term.
It is worth noting, however, that the minutes of the Fed's latest meeting reveal "significant divergence" among officials on whether to proceed with another rate cut in December.
Market watch: the recent U.S. equity sell-off has been driven predominantly by macro factors rather than panic selling triggered by an AI-bubble burst. The pullback was chiefly triggered by the September non-farm payrolls surprise coupled with hawkish Fed rhetoric, prompting profit-taking. With the U.S. labor market showing marginal weakness, the December FOMC meeting could mark the peak of the current "hawkish scare." Thereafter, the market narrative is likely to shift to the political calculus surrounding President-elect Trump's nomination of the next Fed Chair. Fundamentals in the AI segment remain intact. Given exponential token growth, persistent supply-chain bottlenecks, and robust free cash flow and balance-sheet strength among the "Big Four" tech giants, the extreme "AI-bubble burst" scenario is unlikely to materialize in the near term.
Technical Analysis
The Dow Jones Industrial Average has touched its MA100 and is within striking distance of the orange trendline. A minor bounce is underway, but no technical evidence yet confirms that the downtrend is over. Support at the MA20 (45,949) remains intact and continues to act as a backstop.
Price action needs to be monitored closely. If the index extends lower and registers a fresh swing low, the uptrend will be at risk. The baseline scenario expects sideways consolidation around current levels, followed by a rebound that preserves the longer-term bullish structure.
Trade Recommendations
Trade Direction: Buy
Entry Price: 45700
Target Price: 49579
Stop Loss: 44900
Valid Until: December 10, 2025 23:55:00
Support: 45949/45146/44528
Resistance Levels: 46876/47123/48104
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