Meanwhile, next week, President Donald Trump could name a successor to Federal Reserve Chairman Jerome Powell, and a special election in Tennessee could further reduce the Republican Party’s majority in the House of Representatives.
Futures contracts tied to the Dow Jones industrial average fell 48 points on Sunday, or 0.1%. S&P 500 futures were down 0.13% and Nasdaq futures were down 0.12%.
The 10-year Treasury yield rose 1.3 basis points to 4.032%. The US dollar was down 0.04% against the euro and 0.15% against the yen.
Gold rose 0.1% to $4,259.50 an ounce. U.S. oil futures rose 1.55% to $59.46 a barrel and bitcoin fell 0.39% to $90,450.
On Saturday, market veteran Ed Yardeni noted in a note that the S&P 500 had moved back above its 50-day moving average, and supported his view that the broader market index would reach 7,000 by the end of the year, surpassing the record high of 6,920.
“The S&P 500 would need to rise just 2.2% to reach 7,000,” he added. “It could happen next week, in our opinion.”
Considering that the S&P 500 jumped nearly 4% during a trading week shortened by the Thanksgiving holiday, a 2.2% gain isn’t really too far-fetched.
The market rebound has been fueled by hopes that a further rate cut later this month is still on the table, after some hawkish policymakers previously hinted at a wait-and-see stance.
But Trump could still stir up more dovish views if he reveals who his choice would be to take over as Fed chair when Powell’s term expires in May.
“I know who I’m going to choose to be chairman of the Fed. I’ll announce it soon,” Trump told reporters on Sunday.
He declined to confirm whether Kevin Hassett, director of the National Economic Council, would be the one. But the odds in the prediction markets have climbed in his favor, with Kalshi posting a 66% probability that Hassett will be nominated.
That adds to expectations of further easing at the Dec. 9-10 Fed meeting, and CME’s FedWatch tool shows investors see an 87% chance for a quarter-point cut.
Meanwhile, voters will decide Tuesday who will fill a vacancy in a deep-red Tennessee congressional district. Republican Matt Van Epps and Democrat Aftyn Behn are in a tight race, according to some polls, although Trump won the district in a landslide last year.
Lots of money and several national figures are converging on the race. A Behn victory would further shrink the Republican Party’s already slim majority and make affordability a higher priority in Congress.
After Democrats made stunning progress in off-year elections on the issue, another victory could add urgency to efforts to expand the Affordable Care Act’s enhanced subsidies to keep insurance premiums from rising next year.
