On Tuesday, the Dow Jones Industrial Average fell for the ninth consecutive session, marking its longest losing streak since 1978. The index dropped 266 points (0.6%), while the S&P 500 and NASDAQ Composite also declined by 0.4% and 0.3%, respectively.

Key Developments:

Retail Sales Beat Expectations:November retail sales rose by 0.7%, exceeding the forecasted 0.6%, showcasing the resilience of the U.S. economy despite high interest rates. This growth highlights strong consumer spending, a critical driver of economic stability.

API: Economics Calendar: Track upcoming retail sales data and other economic indicators that influence market sentiment.

Federal Reserve’s Rate Cut Expectations:Investors widely expect a 25 basis point rate cut at the conclusion of the Fed’s two-day meeting on Wednesday. However, the central bank’s outlook on rates for 2025 is under scrutiny, as concerns grow over sticky inflation and robust labor market performance.

API: Sector P/E Ratios: Analyze sector-specific performance under varying interest rate regimes, helping investors identify opportunities or risks.

Analyst Outlook:
Goldman Sachs forecasts a slower pace of rate cuts in 2025 and does not anticipate any cuts in January. CME FedWatch indicates an 81.9% probability that the Fed will maintain rates in January, reflecting cautious market sentiment.
With the Fed’s outlook expected to dominate market direction, traders are preparing for a potentially volatile session following Wednesday’s announcement.