Weekly Market Watch

Feds-giving Eve

Global equities were largely flat last week, looking for direction ahead of this week’s Federal Open Market Committee (FOMC) meeting. Economic data released last week generally implied a still-solid economic backdrop, with a strong services report from the Institute for Supply Management^®, below-consensus jobless claims and in-line September inflation data (personal consumption expenditures [PCE]). In contrast, alternate jobs data, including ADP^® private payrolls, pointed to labor market softening. The bond market was quiet last week as well, major indices were relatively flat, and the 10-year U.S. Treasury yield ticked up slightly to 4.13%.

Market Outlook

Investors are focused on this week’s FOMC meeting, with market expectations currently pricing in a high probability for a 25-basis-point cut. In our view, the Federal Reserve’s (Fed’s) messaging will be just as important as a rate cut action. The market will be looking for signals about the path forward for rates and monitoring for dissent within the committee. We expect that potential signs of labor market softening could lead to a more dovish Fed in 2026 — a tailwind for equities.

Chart of the Week

PNC conducted its 42nd annual whimsical economic analysis on the cost of gift-giving in concert with the holiday song, “The 12 Days of Christmas.”

The gifts included in the song will cost 4.5% more than they did in 2024. The rise is primarily attributable to an increase in the “Five Gold Rings” component, reflecting the recent investor flight to gold and other precious metals given Fed rate cuts and a decelerating U.S. dollar.

For more holiday fun, please visit PNC’s interactive website.

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For definitions of indexes used in this publication, please refer to pnc.com/indexdefinitions.

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