Stocks Inch Higher After Job Openings Data: Markets Wrap

(Bloomberg) — Stocks struggled to make headway as traders held off from making big bets ahead of the Federal Reserve’s final interest-rate decision of 2025.

S&P 500 clung to small gains after better-than-expected job openings data for October. The number of available positions climbed to 7.67 million, a Bloomberg survey of economists called for 7.12 million. The rate on 10-year Treasuries rose one basis point to around 4.18% while the dollar was little changed and Bitcoin reversed early losses.

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At an event Tuesday, Kevin Hassett, the frontrunner in Donald Trump’s search to replace Jerome Powell, said he sees plenty of room to substantially lower rates, even more than a quarter-point cut.

“If the data suggests that we could do it, then — like right now — I think there’s plenty of room to do it,” he said during the Wall Street Journal CEO Council Summit.

Money markets see around two cuts in 2026 after a likely quarter-point reduction tomorrow — a retreat from more optimistic forecasts in recent weeks.

“If the Fed is too hawkish, we expect the White House to soon announce Powell’s replacement,” said Fundstrat’s Tom Lee. That would be a “market clearing event,” in his view.

Money markets see around two cuts in 2026 after a likely quarter-point reduction tomorrow — a retreat from more optimistic forecasts in recent weeks.

Tom Essaye pointed to the risk of a hawkish cut, where the Fed lowers interest rates but signals it’s done with rate cuts for the moment.

“It’s not too much of an exaggeration to say that the rate cut is actually the least important part of this meeting,” said the founder of The Sevens Report. The market “cares much more that the Fed signals it will continue to cut rates and does not signal a pause in the rate-cut cycle.”

A dayslong slump in US government bonds has curbed risk appetite as traders grow cautious about the pace of monetary easing beyond Wednesday’s meeting. For now, the Fed’s decision and its guidance for 2026 remain the key focus for markets.

“If the Fed is too hawkish, we expect the White House to soon announce Powell’s replacement,” said Fundstrat’s Tom Lee. That would be a “market clearing event,” in his view.

US stocks may turn more volatile after tomorrow’s meeting than after other recent decisions, with Bloomberg options data showing an implied move of 0.7% in either direction.

Globally, government debt markets have been under pressure as central bankers signal that their easing cycles are coming to an end. On Tuesday, Australia’s Michele Bullock declared her country’s easing phase over, following comments from the European Central Bank’s Isabel Schnabel that she’s comfortable with the next move being higher. The Bank of Japan is expected to hike next week.

“Given all the tension in global bond markets at the moment, the meeting of the Fed could potentially add fuel to the fire,” said Vincent Juvyns, chief investment strategist at ING in Brussels. “Investors will also be watching very closely the results of Oracle and Broadcom. There’s a lot at stake this week.”

While the Fed’s easing cycle is currently intact, investors must still contend with a policy committee that has grown fractious, limited economic data after the government shutdown and uncertainty over the stance of Chair Jerome Powell’s successor.

“A more politicized Fed would likely push front-end yields lower via more aggressive rate-cut expectations,” noted Filip Andersson of Danske Bank A/S. “Higher long-term inflation expectations could lift the inflation risk premium, supporting long-end yields and adding steepening pressure.”

What Bloomberg strategists say…

“While pretty much everyone and their dog expects the Fed to cut rates on Wednesday and to signal some modest additional easing next year, there seems to be a growing realization that US policy expectations are looking out of sync with the rest of the world.

As such, the expectation that tomorrow will see a ‘hawkish cut’ and divides on the committee seems pretty accurate. It does, of course, widen the window for a dovish surprise.”

— Cameron Crise, Macro Strategist, Markets Live. For the full analysis, click here.

Corporate News:

Microsoft Corp. pledged to invest $17.5 billion on artificial intelligence and cloud computing in India, targeting the world’s most populous nation to help fuel its growth. Home Depot Inc. is offering cautious preliminary guidance for next year, a sign that the home-improvement retailer doesn’t anticipate the housing market to rebound in the short term. Google has been hit by a European Union investigation over fears it may have abused its dominance by using its own artificial intelligence tools to squeeze out competition. PepsiCo Inc. reached an agreement with activist investor Elliott Investment Management that includes a 20% reduction in its US product lineup and a sharper focus on affordability, while the soda and snacks company also plans layoffs as part of cost reduction efforts. Trafigura Group reported a “strong” year for both its oil and metals divisions as the commodities trading giant boosted payouts to staff and profit remained resilient. A Bloomberg basket of European defense stocks rose as German lawmakers prepare to approve a record €52 billion ($61 billion) in military procurement contracts. China Vanke Co.’s offshore creditors have started fielding requests for talks with potential advisors, a sign that investors are preparing for a worsening of the developer’s debt crisis. Some of the main moves in markets:

Stocks

The S&P 500 was little changed as of 10:40 a.m. New York time The Nasdaq 100 was little changed The Dow Jones Industrial Average rose 0.2% The Stoxx Europe 600 was little changed The MSCI World Index was little changed Currencies

The Bloomberg Dollar Spot Index was little changed The euro was little changed at $1.1628 The British pound fell 0.2% to $1.3301 The Japanese yen fell 0.6% to 156.79 per dollar Cryptocurrencies

Bitcoin rose 0.3% to $91,622.45 Ether rose 0.8% to $3,173.34 Bonds

The yield on 10-year Treasuries advanced one basis point to 4.18% Germany’s 10-year yield was little changed at 2.86% Britain’s 10-year yield declined one basis point to 4.51% Commodities

West Texas Intermediate crude fell 1.1% to $58.25 a barrel Spot gold rose 0.3% to $4,203.88 an ounce This story was produced with the assistance of Bloomberg Automation.

–With assistance from Andre Janse van Vuuren, Neil Campling and Julien Ponthus.

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