Futures Rally for Strongest November Since 2020

The S&P 500 futures rose by 0.2 % and the Nasdaq 100 futures gained 0.3 %. These gains set the stage for the three major indices to experience their strongest November since 2020. Both the S&P 500 and Nasdaq are approaching their largest monthly percentage gains since July 2022, with 10 out of 11 sectors expected to end the month in positive territory.

The recent rally in equities has been fueled by signs of easing price pressures, dovish comments from some Federal Reserve officials, and robust quarterly earnings. The main focus is now on the PCE Index (Personal Consumption Expenditure Index), the Fed's preferred inflation measure, for the October data.

Market expectations for the upcoming December meeting have fully factored in a pause in rate hikes. However, as potential rate cuts in 2023 are increasingly coming into focus, traders currently estimate the probability of a rate cut of at least 25 basis points by March 2024 at around 44%.

Yesterday, the Nasdaq closed with a slight decrease, signaling investor caution ahead of today's data release. The market has entered an overbought state, as indicated by the Relative Strength Index (RSI). Investors are closely observing these developments to inform their market direction decisions.