U.S. stocks opened lower on Monday as investors entered the final month of the year focused on rising expectations for a Federal Reserve rate cut in the coming weeks.
By 03:34 ET (14:34 GMT), the S&P 500 was down 39 points, or 0.6%. The Nasdaq Composite fell 178 points, or 0.8%, while the Dow Jones Industrial Average declined 263 points, also 0.6%.
All three major indexes advanced more than 3% during last week’s Thanksgiving-shortened trading period. The S&P 500 and Dow closed out November with gains, while the Nasdaq slipped 1.51%, reflecting growing concerns about stretched tech valuations and heavy, often debt-driven, spending tied to artificial intelligence.
Market sentiment has been supported by increasing wagers that the Fed will cut rates by a quarter point at its December 9–10 meeting. Expectations for a rate reduction have surged to about 88%, up from the mid-40% range just over a week ago. Comments from Fed officials hinting that economic conditions may justify a rate cut have added to this shift, though uncertainty persists due to limited recent data following the federal government shutdown.
This week, investors will watch several key indicators, including manufacturing and services activity, consumer sentiment, and private payroll data. Retail stocks may also be in focus after reports showed strong online spending during the Black Friday period.
Fed leadership decision draws attention
Markets are also monitoring President Donald Trump’s confirmation that he has chosen his nominee for the next Federal Reserve chair, though he has not disclosed the name. Reports suggest the shortlist includes White House economic adviser Kevin Hassett, former Fed Governor Kevin Warsh, and current Fed Governor Christopher Waller. Hassett is widely viewed as the leading candidate but has downplayed speculation.
A change in Fed leadership could significantly shape future monetary policy. Trump has repeatedly pushed for faster and deeper rate cuts, raising expectations that his chosen successor to Jerome Powell—whose term ends in May—may adopt a more dovish stance. Such a shift could support growth-oriented and rate-sensitive sectors.
Powell is scheduled to speak later today, but because the Fed is in its blackout period ahead of the meeting, he is not expected to offer new policy guidance.
Oil rises as OPEC+ maintains output stance
Oil prices gained more than 1% after OPEC+ reaffirmed its plan to keep output steady through the first quarter and as geopolitical tensions raised fresh supply concerns.
As of 08:39 ET, Brent crude futures increased 1.5% to $63.31 per barrel, while West Texas Intermediate (WTI) crude futures climbed 1.5% to $59.44 per barrel.
OPEC+ reiterated that it will maintain voluntary cuts of roughly 3.24 million barrels per day into the first quarter of next year. The group emphasized a cautious approach amid uneven demand trends and the risk of oversupply in 2025.
Oil received further support after weekend attacks on Russian energy infrastructure disrupted exports. The Caspian Pipeline Consortium halted loadings after a naval drone strike caused substantial damage to a mooring point at the Novorossiysk terminal, a key route for Kazakh and Russian crude shipments.
