HG MARKETS:

U.S. stock index futures rose on Sunday evening as Wall Street found some relief from softer inflation data, although investors remained cautious about a slower pace of interest rate cuts in the coming year. Last week, the Federal Reserve projected fewer cuts in 2025 than anticipated, which had caused significant losses in Wall Street indexes over two consecutive days, contributing to weekly declines. S&P 500 Futures increased by 0.3% to 6,020.50 points, Nasdaq 100 Futures gained 0.4% to 21,655.25 points, and Dow Jones Futures were up 0.3% at 43,425.0 points.

The PCE price index, a key inflation measure favored by the Fed, rose by 0.1% in November, slower than October’s 0.2% increase. This brought the annual PCE inflation rate to 2.4%, slightly below the expected 2.5%. While the data suggested some cooling in inflation, it remained above the Fed’s 2% target, indicating inflationary pressures persist. The Fed has signaled a cautious approach to monetary policy, highlighting the need for more progress on inflation before considering further rate cuts. Fed officials also expressed concerns about fiscal policy uncertainty, such as tariffs, impacting the outlook. They noted that uncertainty surrounding the new Donald Trump administration’s policies contributed to their forecast of fewer rate cuts in 2025.

The Fed had reduced rates by 25 basis points on Wednesday but projected only two rate cuts in 2025, down from an earlier forecast of four. Wall Street indexes rebounded on Friday but ended lower for the week, as the prospect of rates staying higher for longer led to sharp losses on Wednesday and Thursday. Technology stocks, which had fallen sharply after the Fed’s decision, regained some ground on Friday, helping fuel a broader market rally. NVIDIA (NASDAQ:NVDA) surged 3.1%, Micron Technology (NASDAQ:MU) rose 3.5%, Broadcom (NASDAQ:AVGO) gained 1.1%, and Intel (NASDAQ:INTC) climbed 2.4%. However, Tesla (NASDAQ:TSLA) dropped nearly 3.5%. On Friday, the S&P 500 gained 1.1% to 5,930.90 points, the Dow Jones rose 1.2% to 42,841.06 points, and the NASDAQ increased 1% to 19,572.60 points. For the week, the S&P 500 fell nearly 2%, the Nasdaq dropped 1.8%, and the Dow declined 2.3%.