The Fed Is Unlikely To Lower Interest Rates In The December FOMC Meeting

Markets were focused on Nvidia’s Q3 FY26 results, but the author has turned cautious on the broader US market not because of tech fundamentals but due to a reduced chance of a December 10 Fed rate cut; the BLS delayed November payrolls to Dec. 16 and the CPI report is flagged as a key near-term catalyst. Technically, the S&P 500 has broken a firm uptrend with the next support about 6% lower, leading the author to downgrade to Hold and expect continued downward pressure into the FOMC meeting. Disclosure: the author holds a long position in SOXL.

Analysis

Markets entered the week focused on Nvidia's Q3 FY26 results and broader macro catalysts; the author was bullish on Nvidia heading into earnings but flagged policy risk as the dominant near-term driver. The piece emphasizes a low probability of a Fed rate cut at the December 10 FOMC meeting and notes the BLS delayed the November payrolls report to December 16, while highlighting the Consumer Price Index report as a key catalyst ahead of the meeting. Technically, the S&P 500 has broken a strong upward trend with the next identified support roughly 6% below current levels, prompting the author to downgrade to Hold and expect continued downward pressure into the FOMC meeting. The author discloses a beneficial long position in SOXL; sentiment outputs show NVDA modestly positive, AMD neutral, SOXL mildly positive, and SPY moderately negative, consistent with a market that remains vulnerable to policy-driven multiple compression rather than company-specific fundamental shocks.

Key Decisions for Investors

• Reduce broad US equity beta or move to a neutral/Hold stance into the December 10 FOMC meeting and the CPI release, because the author expects downward pressure and a low chance of a rate cut
• Avoid material new leveraged or speculative long exposure to sector ETFs such as SOXL ahead of macro clarifying events given the author's disclosed long position and potential bias
• If holding or initiating individual tech positions (including NVDA), size positions conservatively and prefer post-earnings confirmation of revenue/guide over pre-earnings conviction because policy risk, not fundamentals, is the primary near-term driver
• Use option-based hedges or tighter stop-losses to protect portfolios against a ~6% technical downside in the S&P 500 and monitor the delayed payrolls (Dec 16) and CPI prints as decisive catalysts for repositioning