"S&P 500 futures were up a solid 0.35% this morning before the opening bell in New York, after the index added 0.88% in its Friday session. The Christmas week is-obviously-often a quiet one with thin trading and low volatility. Traders are focused more on positioning for 2026 than they are on the week ahead and so far they appear to like what they are seeing in the year ahead.We may even see a new all-time high-the S&P is just less than 1% from its previous record peak."
"Most recently, the U.S. Federal Reserve delivered a cut in interest rates of 25 basis points, bringing the base rate down to 3.5%. Cheaper borrowing costs usually result in more money flowing into equities. Traders are not expecting another interest rate cut in January but 46% of them are now pricing in one for March, according to CME FedWatch tool, which tracks bets on fed funds futures. That number has been ticking up gradually all month."
"It is not intended to be a new round of "quantitative easing," but as far as some on Wall Street are concerned it might as well be-and that's likely to be good for stocks. "Over the past 2 weeks, the Fed's balance sheet has grown by $21.1b using Reserve Management Purchases (RMPs), with the stated intent of keeping repo and related markets operating smoothly," Piper Sandler's Chief Global Economist Nancy Lazar told clients over the weekend. "The Fed emphatically says this is not Quantitative Easing.""
S&P 500 futures rose before the New York open after a strong Friday session, while holiday-week trading remained thin and volatility low. Investors are concentrating on positioning for 2026, and the index sits under 1% from its prior record high. The Federal Reserve cut its base interest rate by 25 basis points to 3.5%, and markets now price a roughly 46% chance of a March cut per CME FedWatch. The Fed launched $40 billion monthly Reserve Management Purchases to add repo-market liquidity by buying short-dated T-bills. Some market participants view the balance-sheet growth as QE-like and supportive for stocks.
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