On Tuesday morning, S&P futures exhibited minimal movement, even as Nvidia shares experienced a rise following President Donald Trump’s approval of H200 chip sales to China, a transaction that secures a substantial profit for the U.S. government. Futures associated with the Dow Jones Industrial Average remained marginally above the neutral point. Futures for both the S&P and the Nasdaq 100 experienced an increase of less than 0.1%. In after-hours trading, Nvidia experienced an increase of over 2% after a post on Monday evening indicated that the chipmaking giant could distribute its H200 chips to “approved customers” in China and other regions, contingent upon a stipulation that a quarter of the sales would be remitted to the U.S. government. Trump stated that Chinese President Xi Jinping “responded positively” to the deal. Nvidia Chief Executive Jensen Huang met with Trump last week, and the agreement signifies a favorable outcome for the tech giant following months of trade negotiations.

In Monday’s trading session, technology equities emerged as the outperformers. Among the 11 sectors of the S&P 500, the technology sector stood out as the sole performer in positive territory, supported by advancements in several semiconductor companies. Broadcom’s shares increased by nearly 3%, while Nvidia and Microsoft each saw gains of approximately 2%, following a report from The Information indicating that Microsoft is contemplating the design of custom chips in collaboration with Broadcom. In the latest trading session, all three major U.S. stock indexes experienced a decline, while the 10-year Treasury yield continued its upward trajectory amid ongoing concerns regarding the effects of persistent inflation. This week, market participants are anticipating the Federal Reserve’s much-anticipated interest rate decision on Wednesday, marking the final announcement of the year. Market participants are anticipating that the Federal Reserve will reduce its primary overnight lending rate by an additional quarter percentage point, mirroring the adjustments made during its meetings in September and October.

Fed funds futures indicate an 89% probability of a reduction, an increase from below 67% approximately one month prior, as per sources. “While a rate cut feels almost certain at this point, the Fed’s economic projections and Chairman Powell’s commentary will play a significant role in how markets react — not only this week, but it could possibly set the tone for the remainder of the month,” Bret Kenwell stated. “Following the recent decline in equities and cryptocurrencies, risk-on investors are optimistic that the Federal Reserve will facilitate a year-end rally instead of dampening the recent recovery.” The release of September’s core personal consumption expenditures price index data on Friday provided a notable uplift to stock markets last week. The three principal U.S. stock averages experienced an upward trajectory, marking a consecutive week of gains. Kenwell observed that the Federal Reserve is navigating a complex interplay of elements as it approaches its decision: persistent inflation, an uncertain macroeconomic environment, economic data hindered by the unprecedented U.S. government shutdown, and anticipations surrounding a new chairman.

“There are numerous factors at play for the Fed in 2026. … That raises the critical issue: Will the Fed manage to maintain an accommodative stance if these conditions continue into 2026, or will its dual mandate constrain the doves?” he stated. Separately, investors this week will analyze earnings reports from significant players in artificial intelligence, Oracle and Broadcom, as well as retailers Costco and Lululemon.