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Markets Edge Higher as December Rate Cut Becomes Near Certainty: Earnings Send Stocks Flying and Tumbling

MarketDash Editorial Team
5 days ago
U.S. stock futures climbed Wednesday morning, continuing Tuesday's momentum as markets price in an 87% probability of a Fed rate cut this month. Marvell surged nearly 10% on strong results while Acadia Healthcare cratered over 20% after slashing guidance.

Wednesday morning brought another dose of optimism to U.S. markets, with futures across the board pushing higher after Tuesday's modest gains. It's the kind of momentum that feels quietly confident rather than exuberant, the market equivalent of a knowing nod rather than a fist pump.

The numbers tell a straightforward story: Dow Jones futures climbed 0.21%, S&P 500 futures advanced 0.16%, Nasdaq 100 futures gained 0.10%, and the Russell 2000 led the pack with a 0.37% increase. Meanwhile, Treasury yields held relatively steady with the 10-year bond at 4.08% and the two-year at 3.49%.

Here's the really interesting part: according to the CME Group's FedWatch tool, markets are now pricing in an 87% probability that the Federal Reserve will cut interest rates at its December meeting. That's not just optimism, it's near certainty. Investors have essentially made up their minds about what Jerome Powell and company will do, which makes the actual decision almost a formality at this point.

In premarket trading, the SPDR S&P 500 ETF Trust (SPY) rose 0.17% to $682.67, while the Invesco QQQ Trust ETF (QQQ) advanced 0.14% to $622.85. Both ETFs track their respective indices and provide a real-time glimpse into where institutional money is flowing.

In other news that probably won't move markets but is certainly unusual, President Donald Trump launched "Trump Accounts," a program that provides every eligible newborn in the U.S. with a $1,000 government-funded savings account. It's an interesting policy experiment in jumpstarting financial futures from day one, though the fiscal implications and long-term viability remain to be seen.

The Earnings Winners and Losers

Wednesday's premarket action featured the usual mix of euphoria and despair that comes with earnings season. Let's start with the winners.

Marvell Technology Surges on Strong Results

Marvell Technology Inc. (MRVL) absolutely soared, jumping 9.83% after delivering third-quarter results that exceeded expectations. The semiconductor company also announced it's acquiring Celestial AI, a move that investors clearly appreciated. When a tech stock rallies nearly 10% in premarket trading, it's not just good news—it's the kind of beat-and-raise performance that gets portfolio managers excited.

According to market data, MRVL maintains a stronger price trend across short, medium, and long-term timeframes, with a moderate growth ranking. The stock has been riding the broader semiconductor wave that's benefited from AI infrastructure spending, and Wednesday's results suggest that momentum isn't slowing down.

American Eagle Outfitters Delivers Surprise Strength

Retail hasn't exactly been the darling of this market cycle, which makes American Eagle Outfitters Inc. (AEO)'s 12.71% surge all the more impressive. The apparel retailer reported third-quarter revenue of $1.36 billion, beating analyst estimates of $1.32 billion. Even better, adjusted earnings came in at 53 cents per share versus expectations of 44 cents.

That's a meaningful beat on both the top and bottom lines, suggesting that despite all the concerns about consumer spending and discretionary retail, some companies are still figuring out how to win. Market data shows AEO maintains stronger price trends across all timeframes, though with a poor quality ranking that suggests the fundamentals may not be quite as robust as the price action indicates.

CrowdStrike's Paradox: Good News, Down Stock

Sometimes the market works in mysterious ways. CrowdStrike Holdings Inc. (CRWD) dropped 2.36% despite reporting better-than-expected third-quarter financial results and raising its full-year guidance. Yes, you read that correctly—the cybersecurity company delivered exactly what investors supposedly want to see, and the stock fell anyway.

This is one of those "buy the rumor, sell the news" situations where expectations may have simply run too far ahead of reality. Or perhaps investors are concerned about something in the forward guidance that isn't immediately obvious. Either way, CRWD maintains stronger price trends over the medium and long term, but shows weakness in the short term. The market is clearly still processing the implications of that massive software outage earlier this year.

Salesforce Awaits Its Moment

Salesforce Inc. (CRM) edged 0.55% higher in premarket trading as investors positioned ahead of quarterly results due after the closing bell. Analysts expect earnings of $2.86 per share on revenue of $10.27 billion. The cloud software giant will need to deliver not just on those numbers but also provide compelling guidance about AI integration and enterprise spending trends.

Market data shows CRM maintains weaker price trends across short, medium, and long-term periods, with a poor value ranking. That's not exactly a vote of confidence going into earnings, which means the company will need to exceed expectations to change the narrative.

Acadia Healthcare's Brutal Guidance Cut

The day's biggest loser was Acadia Healthcare Company Inc. (ACHC), which plunged 22.80% after lowering its full-year financial outlook. That's the kind of single-day destruction that erases months of gains and leaves investors questioning what went wrong.

When a healthcare company slashes guidance like this, it typically signals operational challenges that management didn't see coming or at least didn't communicate effectively. ACHC maintains weaker price trends across all timeframes with a poor quality ranking, suggesting the technical damage compounds already questionable fundamentals.

Tuesday's Market Action in Context

To understand Wednesday's optimism, it helps to look at where markets closed Tuesday. The major indices finished higher, led by industrials and information technology stocks that more than offset losses in utilities, energy, and materials.

The Nasdaq Composite advanced 0.59% to close at 23,413.67, while the S&P 500 gained 0.25% to finish at 6,829.37. The Dow Jones Industrial Average rose 0.39% to 47,474.46, though the Russell 2000 slipped 0.17% to 2,464.98. It was the kind of session where the winners won bigger than the losers lost, which is exactly what you want to see in a healthy market.

BlackRock's Pro-Risk Perspective

BlackRock, one of the world's largest asset managers, continues to maintain what it calls a "pro-risk" investment stance, with particular favor for U.S. equities. Their reasoning centers on a softening labor market that they believe gives the Federal Reserve room to cut rates without immediately reigniting inflation concerns.

The firm characterizes the current employment situation as "no hiring, no firing" stasis—companies aren't aggressively adding headcount, but they're also not conducting mass layoffs. This Goldilocks scenario allows the central bank to pursue what BlackRock calls "risk management" cuts, essentially taking out insurance against economic weakness without having to respond to an actual crisis.

This cooling labor backdrop, combined with what BlackRock describes as a rebounding "AI theme," reinforces their overweight position in U.S. stocks. They argue these equities are "backed by stronger earnings and profitability relative to other developed markets," which is investment-speak for saying American companies simply make more money than their international counterparts.

That said, BlackRock isn't blindly bullish. The firm acknowledges longer-term structural risks, specifically pointing to a "risk of revived tensions between sticky inflation and debt sustainability." Translation: at some point, the government's massive debt load and persistent inflation could create a policy bind that makes the Fed's job much harder.

For now, though, BlackRock believes the Fed has space to ease policy "without raising questions around these policy tensions," which supports a constructive outlook for risk assets heading into 2026. It's a nuanced view that acknowledges both the opportunities and the lurking dangers in current market conditions.

Economic Data on the Horizon

Wednesday brings a packed calendar of economic releases that could move markets if they significantly deviate from expectations. November's ADP employment data drops at 8:15 a.m. ET, providing a preview of Friday's official jobs report. At 8:30 a.m., we'll finally get September's delayed import price index, while September's industrial production and capacity utilization data arrives at 9:15 a.m.

Later in the morning, November's S&P final U.S. services data comes out at 9:45 a.m., followed by ISM services data at 10:00 a.m. The ISM services report will be particularly important given that services comprise the vast majority of the U.S. economy. Any significant weakness there would undermine the soft-landing narrative that's currently supporting stock prices.

Commodities, Crypto, and Global Markets

Beyond equities, other asset classes showed mixed behavior Wednesday morning. Crude oil futures climbed 1.24% to trade around $59.37 per barrel, continuing a modest recovery after recent weakness. Gold Spot fell 0.10% to hover around $4,201.56 per ounce, well below its recent record high of $4,381.60. The U.S. Dollar Index declined 0.20% to 99.1560.

Bitcoin (BTC) rallied sharply, surging 7.50% to trade at $92,924.91 per coin. That's a significant one-day move for the cryptocurrency, suggesting renewed appetite for risk assets or perhaps fresh optimism about regulatory clarity under the current administration.

Asian markets closed with mixed results Wednesday. India's NIFTY 50, Hong Kong's Hang Seng, and China's CSI 300 indices all declined, while Japan's Nikkei 225, Australia's ASX 200, and South Korea's Kospi indices posted gains. European markets were mostly higher in early trading, tracking the positive sentiment in U.S. futures.

The global picture suggests investors are selectively optimistic rather than uniformly bullish. China's continued weakness remains a concern, while developed markets in Asia and Europe appear more comfortable leaning into risk. It's a fragmented landscape that reflects the varying economic trajectories and policy responses across different regions.

As Wednesday's trading session gets underway, markets seem positioned for continued modest gains unless economic data or corporate earnings deliver unexpected surprises. The near certainty of a December Fed rate cut provides a supportive backdrop, while strong earnings from companies like Marvell and American Eagle demonstrate that some businesses are thriving despite macro uncertainties. Whether this momentum can sustain itself through year-end depends largely on whether the data cooperates with the soft-landing narrative investors have embraced.

Back to News

Markets Edge Higher as December Rate Cut Becomes Near Certainty: Earnings Send Stocks Flying and Tumbling

MarketDash Editorial Team
5 days ago
U.S. stock futures climbed Wednesday morning, continuing Tuesday's momentum as markets price in an 87% probability of a Fed rate cut this month. Marvell surged nearly 10% on strong results while Acadia Healthcare cratered over 20% after slashing guidance.

Wednesday morning brought another dose of optimism to U.S. markets, with futures across the board pushing higher after Tuesday's modest gains. It's the kind of momentum that feels quietly confident rather than exuberant, the market equivalent of a knowing nod rather than a fist pump.

The numbers tell a straightforward story: Dow Jones futures climbed 0.21%, S&P 500 futures advanced 0.16%, Nasdaq 100 futures gained 0.10%, and the Russell 2000 led the pack with a 0.37% increase. Meanwhile, Treasury yields held relatively steady with the 10-year bond at 4.08% and the two-year at 3.49%.

Here's the really interesting part: according to the CME Group's FedWatch tool, markets are now pricing in an 87% probability that the Federal Reserve will cut interest rates at its December meeting. That's not just optimism, it's near certainty. Investors have essentially made up their minds about what Jerome Powell and company will do, which makes the actual decision almost a formality at this point.

In premarket trading, the SPDR S&P 500 ETF Trust (SPY) rose 0.17% to $682.67, while the Invesco QQQ Trust ETF (QQQ) advanced 0.14% to $622.85. Both ETFs track their respective indices and provide a real-time glimpse into where institutional money is flowing.

In other news that probably won't move markets but is certainly unusual, President Donald Trump launched "Trump Accounts," a program that provides every eligible newborn in the U.S. with a $1,000 government-funded savings account. It's an interesting policy experiment in jumpstarting financial futures from day one, though the fiscal implications and long-term viability remain to be seen.

The Earnings Winners and Losers

Wednesday's premarket action featured the usual mix of euphoria and despair that comes with earnings season. Let's start with the winners.

Marvell Technology Surges on Strong Results

Marvell Technology Inc. (MRVL) absolutely soared, jumping 9.83% after delivering third-quarter results that exceeded expectations. The semiconductor company also announced it's acquiring Celestial AI, a move that investors clearly appreciated. When a tech stock rallies nearly 10% in premarket trading, it's not just good news—it's the kind of beat-and-raise performance that gets portfolio managers excited.

According to market data, MRVL maintains a stronger price trend across short, medium, and long-term timeframes, with a moderate growth ranking. The stock has been riding the broader semiconductor wave that's benefited from AI infrastructure spending, and Wednesday's results suggest that momentum isn't slowing down.

American Eagle Outfitters Delivers Surprise Strength

Retail hasn't exactly been the darling of this market cycle, which makes American Eagle Outfitters Inc. (AEO)'s 12.71% surge all the more impressive. The apparel retailer reported third-quarter revenue of $1.36 billion, beating analyst estimates of $1.32 billion. Even better, adjusted earnings came in at 53 cents per share versus expectations of 44 cents.

That's a meaningful beat on both the top and bottom lines, suggesting that despite all the concerns about consumer spending and discretionary retail, some companies are still figuring out how to win. Market data shows AEO maintains stronger price trends across all timeframes, though with a poor quality ranking that suggests the fundamentals may not be quite as robust as the price action indicates.

CrowdStrike's Paradox: Good News, Down Stock

Sometimes the market works in mysterious ways. CrowdStrike Holdings Inc. (CRWD) dropped 2.36% despite reporting better-than-expected third-quarter financial results and raising its full-year guidance. Yes, you read that correctly—the cybersecurity company delivered exactly what investors supposedly want to see, and the stock fell anyway.

This is one of those "buy the rumor, sell the news" situations where expectations may have simply run too far ahead of reality. Or perhaps investors are concerned about something in the forward guidance that isn't immediately obvious. Either way, CRWD maintains stronger price trends over the medium and long term, but shows weakness in the short term. The market is clearly still processing the implications of that massive software outage earlier this year.

Salesforce Awaits Its Moment

Salesforce Inc. (CRM) edged 0.55% higher in premarket trading as investors positioned ahead of quarterly results due after the closing bell. Analysts expect earnings of $2.86 per share on revenue of $10.27 billion. The cloud software giant will need to deliver not just on those numbers but also provide compelling guidance about AI integration and enterprise spending trends.

Market data shows CRM maintains weaker price trends across short, medium, and long-term periods, with a poor value ranking. That's not exactly a vote of confidence going into earnings, which means the company will need to exceed expectations to change the narrative.

Acadia Healthcare's Brutal Guidance Cut

The day's biggest loser was Acadia Healthcare Company Inc. (ACHC), which plunged 22.80% after lowering its full-year financial outlook. That's the kind of single-day destruction that erases months of gains and leaves investors questioning what went wrong.

When a healthcare company slashes guidance like this, it typically signals operational challenges that management didn't see coming or at least didn't communicate effectively. ACHC maintains weaker price trends across all timeframes with a poor quality ranking, suggesting the technical damage compounds already questionable fundamentals.

Tuesday's Market Action in Context

To understand Wednesday's optimism, it helps to look at where markets closed Tuesday. The major indices finished higher, led by industrials and information technology stocks that more than offset losses in utilities, energy, and materials.

The Nasdaq Composite advanced 0.59% to close at 23,413.67, while the S&P 500 gained 0.25% to finish at 6,829.37. The Dow Jones Industrial Average rose 0.39% to 47,474.46, though the Russell 2000 slipped 0.17% to 2,464.98. It was the kind of session where the winners won bigger than the losers lost, which is exactly what you want to see in a healthy market.

BlackRock's Pro-Risk Perspective

BlackRock, one of the world's largest asset managers, continues to maintain what it calls a "pro-risk" investment stance, with particular favor for U.S. equities. Their reasoning centers on a softening labor market that they believe gives the Federal Reserve room to cut rates without immediately reigniting inflation concerns.

The firm characterizes the current employment situation as "no hiring, no firing" stasis—companies aren't aggressively adding headcount, but they're also not conducting mass layoffs. This Goldilocks scenario allows the central bank to pursue what BlackRock calls "risk management" cuts, essentially taking out insurance against economic weakness without having to respond to an actual crisis.

This cooling labor backdrop, combined with what BlackRock describes as a rebounding "AI theme," reinforces their overweight position in U.S. stocks. They argue these equities are "backed by stronger earnings and profitability relative to other developed markets," which is investment-speak for saying American companies simply make more money than their international counterparts.

That said, BlackRock isn't blindly bullish. The firm acknowledges longer-term structural risks, specifically pointing to a "risk of revived tensions between sticky inflation and debt sustainability." Translation: at some point, the government's massive debt load and persistent inflation could create a policy bind that makes the Fed's job much harder.

For now, though, BlackRock believes the Fed has space to ease policy "without raising questions around these policy tensions," which supports a constructive outlook for risk assets heading into 2026. It's a nuanced view that acknowledges both the opportunities and the lurking dangers in current market conditions.

Economic Data on the Horizon

Wednesday brings a packed calendar of economic releases that could move markets if they significantly deviate from expectations. November's ADP employment data drops at 8:15 a.m. ET, providing a preview of Friday's official jobs report. At 8:30 a.m., we'll finally get September's delayed import price index, while September's industrial production and capacity utilization data arrives at 9:15 a.m.

Later in the morning, November's S&P final U.S. services data comes out at 9:45 a.m., followed by ISM services data at 10:00 a.m. The ISM services report will be particularly important given that services comprise the vast majority of the U.S. economy. Any significant weakness there would undermine the soft-landing narrative that's currently supporting stock prices.

Commodities, Crypto, and Global Markets

Beyond equities, other asset classes showed mixed behavior Wednesday morning. Crude oil futures climbed 1.24% to trade around $59.37 per barrel, continuing a modest recovery after recent weakness. Gold Spot fell 0.10% to hover around $4,201.56 per ounce, well below its recent record high of $4,381.60. The U.S. Dollar Index declined 0.20% to 99.1560.

Bitcoin (BTC) rallied sharply, surging 7.50% to trade at $92,924.91 per coin. That's a significant one-day move for the cryptocurrency, suggesting renewed appetite for risk assets or perhaps fresh optimism about regulatory clarity under the current administration.

Asian markets closed with mixed results Wednesday. India's NIFTY 50, Hong Kong's Hang Seng, and China's CSI 300 indices all declined, while Japan's Nikkei 225, Australia's ASX 200, and South Korea's Kospi indices posted gains. European markets were mostly higher in early trading, tracking the positive sentiment in U.S. futures.

The global picture suggests investors are selectively optimistic rather than uniformly bullish. China's continued weakness remains a concern, while developed markets in Asia and Europe appear more comfortable leaning into risk. It's a fragmented landscape that reflects the varying economic trajectories and policy responses across different regions.

As Wednesday's trading session gets underway, markets seem positioned for continued modest gains unless economic data or corporate earnings deliver unexpected surprises. The near certainty of a December Fed rate cut provides a supportive backdrop, while strong earnings from companies like Marvell and American Eagle demonstrate that some businesses are thriving despite macro uncertainties. Whether this momentum can sustain itself through year-end depends largely on whether the data cooperates with the soft-landing narrative investors have embraced.