US stock futures displayed a muted performance as the market approached a holiday-shortened week, reflecting a downbeat sentiment as November drew to a close. This week saw trading activity disrupted when the Chicago Mercantile Exchange (CME) halted operations due to a data center glitch, affecting futures and options trading across various markets, including US Treasurys and crude oil. The CME has begun the process of restoring operations following the outage, though it remains unclear when full trading will resume.
Prior to the trading freeze, futures linked to the Dow Jones Industrial Average and the S&P 500 were both showing slight gains of 0.1%, while contracts for the tech-heavy Nasdaq 100 were up by 0.2%. In premarket trading, individual stocks such as Alphabet and Nvidia were moving higher, reflecting ongoing investor interest.
This week has witnessed a notable rebound in stock prices, driven largely by increased expectations that the Federal Reserve may cut interest rates during its December meeting, which is just weeks away. The renewed enthusiasm surrounding artificial intelligence (AI) investments has further buoyed tech stocks leading into the Thanksgiving holiday.
However, when markets do reopen after the outage, they will be contending with a challenging month, characterized by a downturn in megacap tech stocks. Investors have been recalibrating their expectations regarding the pace at which AI-driven companies can convert anticipated growth into tangible profits. By the end of Wednesday’s trading session, both the Dow and S&P 500 had registered marginal declines for the month, poised to end what would have been a six-month streak of positive performance. Meanwhile, the Nasdaq had fallen nearly 2%, on track to break a seven-month run of gains.
As November comes to a close, analysts have begun to unveil their market predictions for the upcoming year. Deutsche Bank has set a bold target for the S&P 500 to reach 8,000 by the end of 2026, which is at the upper end of the range compared to other forecasts. In contrast, banks like HSBC and JPMorgan have projected that the benchmark index will probably settle around 7,500.
The US markets are expected to close early on Friday, at 1 p.m. ET, with no significant earnings announcements or economic data releases on the agenda.
In the aftermath of the CME’s trading suspension, operations are being gradually restored; the foreign-exchange platform EBS resumed trading around 7 a.m. ET. However, other markets affected by the outage remain inactive. According to CME, the trading halt was caused by a cooling issue at the CyrusOne data centers. As a result, liquidity in a range of markets—including precious metals—was impacted, creating wider bid-ask spreads.
Gold prices are trending upward and are on track for a fourth consecutive monthly gain, primarily due to rising expectations around US interest rate cuts. Gold futures hovered near $4,160 an ounce on Friday, up over 2% for the week, as commentary from Federal Reserve officials alongside delayed economic reports bolstered the case for easing borrowing costs. Swap traders are currently indicating an over 80% probability of a quarter-point rate cut in December.
Meanwhile, Oracle shares saw a decline of more than 1% in premarket trading as concerns over the credit market were raised, particularly with respect to the company’s substantial investments in AI. Conversely, Alphabet’s stock gained about 1% as investor focus zeroed in on its competitive AI initiatives. Additionally, Strategy, the largest corporate holder of bitcoin, saw its shares rise by 2% despite experiencing a 5% drop over the previous week due to bitcoin’s fluctuations.
As the trading landscape remains uncertain with the CME outage, market participants will be closely monitoring updates on the restoration of trading and the implications for the broader financial picture.
