Calm Before the Fed: Nvidia Pops, Ares Climbs, Paramount Advances in Early Trade

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Morning Market Snapshot – Tuesday, December 9, 2025

Overnight trading set a cautious but generally constructive tone ahead of a pivotal Federal Reserve meeting. U.S. equity futures are slightly higher, with Dow, S&P 500, and Nasdaq 100 futures all up around 0.1 percent, signaling a modest rebound after Monday’s pullback. The move aligns with a global pattern of stabilization rather than outright risk-on appetite as traders weigh both central bank policy and fresh geopolitical and trade headlines.

The dominant macro story is clear. The Fed begins its two-day meeting today, with markets widely expecting a 25-basis point rate cut, while the real debate centers on how many more cuts officials will signal for 2026 and beyond. Global government bond markets, which saw a sharp selloff on Monday, have paused and retraced slightly, with 10-year U.S. Treasury yields drifting near 4.15 percent and German 10-year yields easing after their biggest daily rise in months. That cooling in yields has removed some immediate pressure from equities but has not shifted the underlying uncertainty around the Fed’s long term reaction function.

In Asia, sentiment was weaker. Regional equity indices slipped as investors digested the prospect of a divided Fed and higher yields, along with headline risk around U.S. China technology trade. The U.S. decision to let Nvidia’s H200 AI chips be exported to China, subject to a 25 percent fee, pushed Chinese tech shares lower even as Nvidia itself rallied in U.S. pre-market trade. The mixed read through reflects competing narratives: better revenue visibility for U.S. chipmakers versus ongoing strategic pressure on Chinese tech.

In Europe, equities are mixed to slightly higher, tracking small gains in U.S. futures. Broader European benchmarks and U.S. futures are described as “a fraction higher” in early trade, consistent with a market that is marking time until it hears from the Fed tomorrow. The FTSE 100 remains under pressure, struggling around key technical levels amid concerns that a cautious Fed and lingering growth worries could cap further upside for cyclicals.

On the FX and commodities side, the dollar is steady, the euro and sterling are slightly firmer, and the yen is flat despite an earthquake in Japan. Oil prices have stabilized after a roughly 2 percent drop in the prior session, while gold edges higher, reflecting ongoing demand for hedges against both policy and geopolitical uncertainty.

Put simply, overnight trade has been about positioning rather than conviction. The market is leaning mildly risk on, helped by specific stock stories in AI and index inclusions, but is clearly reluctant to make big bets until it hears how the Fed frames the path for rates in 2026.

Pre-Market News Catalysts (U.S. stocks)

Nvidia (NVDA): Nvidia shares are up roughly 1.5 to 2 percent in pre market trading after President Donald Trump said the U.S. will allow the company to export its H200 AI processors to approved customers in China and collect a 25 percent fee on those sales. The move partially relaxes prior export controls and has analysts talking about upside to Nvidia’s 2026 revenue expectations from China related demand.
Ares Management (ARES): Ares is surging, up around 9 to 13 percent pre market, after S&P Dow Jones Indices confirmed the firm will join the S&P 500 on December 11, replacing Kellanova as that company is acquired by Mars. Index additions typically trigger forced buying from passive funds and benchmarked managers, and overnight commentary highlights Ares’ growing weight in the mainstream alternative asset management universe.
Paramount Skydance (PSKY): Paramount Skydance is higher again in early trading as investors continue to react to its hostile all cash bid for Warner Bros. Discovery at 30 dollars per share, a deal that values WBD at about 108 billion dollars and aims to create a content powerhouse competing with Netflix. The offer, which provides an estimated 18 billion dollars more in cash than Netflix’s proposal, has sparked expectations of a bidding war and driven heavy options activity in both PSKY and WBD.
Mama’s Creations (MAMA): Smaller cap Mama’s Creations is up more than 13 percent pre market after the company reported better than expected quarterly results, drawing speculative interest from retail traders and momentum screens that track early gappers.

The Day’s Debate (The Bull vs. Bear Case)

The Bull Case: Fed Flexibility, AI Tailwinds, and Index Flows

The bullish narrative this morning starts with the idea that the Fed is still on the market’s side, even if it speaks cautiously. Futures markets and strategist commentary suggest that a 25 basis point cut is virtually locked in, with at least some chance that the Fed will keep a path toward additional easing in 2026 if growth softens. Bulls argue that the recent back up in bond yields has already tightened financial conditions, which gives policymakers scope to lean slightly dovish on the outlook while still appearing vigilant on inflation.

Global bond markets support this view. After Monday’s sharp selloff in German and U.S. government bonds, yields have edged lower and price action has calmed.That stabilization indicates that fixed income investors may be close to a new equilibrium on the rate path, which in turn reduces the risk of another sudden valuation shock for equities. Strategists at large asset managers quoted overnight highlight that as long as the Fed signals readiness to respond to any renewed slowdown in growth, risk assets can tolerate a modestly higher rate environment.

Stock specific stories also feed the bullish case. The U.S. decision to allow Nvidia’s H200 chips to be sold into China, subject to fees and controls, underscores the notion that AI remains a strategic priority that both Washington and Beijing want to harness rather than suppress outright. With Nvidia now rallying and AI related capex still strong, bulls see this as evidence that the market’s most important growth engine is intact.

Index flows form another layer of support. The inclusion of Ares Management in the S&P 500 is a reminder that alternative asset managers and other fee rich franchises continue to climb the index ranks, pulling in structural demand from ETFs and benchmarks. Combined with still solid corporate earnings and resilient consumer spending, the optimistic camp concludes that any Fed induced dip is more likely to be bought than to trigger a lasting bear trend.

The Bear Case: Divided Fed, Sticky Yields, and Stretched Risk Assets

The bearish narrative focuses less on today’s small lift in futures and more on the fragility beneath the surface. Bears emphasize that bond markets have been flashing warning signs. Monday’s jump in German and U.S. yields, driven in part by hawkish comments from European Central Bank officials and concerns about fiscal risks in Japan, shows how quickly rate expectations can reset. Even after today’s modest pullback in yields, benchmark rates remain near multi month highs, which tightens financial conditions for households and corporates.

Attention is also on the possibility of a divided Fed. Overnight commentary notes that markets are highly sensitive to any sign that the committee is uncomfortable with the current easing path. Analysts warn that if the dot plot or Chair Powell’s tone hint at fewer cuts in 2026, or highlight upside risks to inflation, equity valuations that sit near record highs could come under renewed pressure. Hedge funds and volatility specialists cited in recent notes are already positioning for larger swings around the announcement, particularly in rate sensitive sectors and crowded AI trades.

Global risk appetite overnight does not fully endorse the optimistic view. Asian equities fell, the Hang Seng Tech index dropped nearly 2 percent, and Chinese tech names slid even as Nvidia rallied, underscoring how policy tweaks to export rules can create winners and losers and keep geopolitical risk front and center. In Europe, indices are struggling to build momentum and the FTSE 100 is fighting to hold key support as investors worry about the growth implications of higher for longer policy.

Bears also argue that recent gains have pulled forward a lot of good news. U.S. benchmarks remain close to record levels, even as earnings revisions flatten and economic surprise indices cool. The combination of rich valuations, tighter financial conditions, and a Fed that might signal less enthusiasm for future cuts creates what one strategist described as a market “priced for perfection on policy and AI at the same time” which leaves little margin for error over the coming days.

The Strategic Takeaway

As the opening bell approaches, the central strategic question is how much of the Fed’s path is already embedded in prices. Overnight action indicates that markets are not in full risk off mode. U.S. futures are slightly green, global bond markets have stabilized after a sharp selloff, and stock specific stories in AI, alternatives, and media are still attracting fresh capital.

Yet beneath that calm surface, positioning is tight and expectations are high. The market is effectively asking the Fed to validate a scenario where growth slows gently, inflation glides lower, and AI linked earnings continue to surprise on the upside. Any deviation in tone, dots, or press conference messaging that points to fewer cuts or lingering inflation concerns would land in a backdrop of stretched valuations and already nervous global risk sentiment.

For traders, the key is to separate durable signals from noisy pre market moves. Nvidia’s bounce on export relief, Ares’ jump on index inclusion, and Paramount Skydance’s M&A story are all meaningful, but their impact will likely be filtered through whatever the Fed communicates tomorrow. The single most important takeaway is that policy communication risk is the primary driver today. Position sizing, use of options around the decision, and discipline on entries and exits matter more than chasing early green in futures.

Upcoming Session Outlook with Directional Bias

Into the U.S. open, the weight of evidence points to a session that leans positive but remains highly headline sensitive. Futures are modestly higher, supported by relief in bond markets and strong stock specific catalysts in Nvidia and Ares, while global risk sentiment is guarded rather than outright negative. At the same time, Asia’s overnight weakness, mixed European trade, and persistent concerns about the Fed’s internal debate argue against a straightforward risk on day.

Intraday flows are likely to favor large cap quality and AI beneficiaries, along with index entrants that are seeing passive demand. More speculative pockets that have rallied hard into the meeting could see profit taking on any hint of hawkishness from Fed speakers in pre blackout commentary or related macro data releases like JOLTS. Volatility sellers may stay on the sidelines until the Fed is out of the way, which leaves room for quick swings if headlines surprise.

Directional bias for the U.S. open: Slightly Bullish, with a strong caveat that moves are likely to remain constrained and subject to rapid reversal on any Fed related headlines.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, or legal advice. The information provided is a synthesis of publicly available data and expert analysis and should not be considered a recommendation to buy or sell any security. Investing in the stock market involves risk, including the possible loss of principal. Past performance is not indicative of future results. Readers should consult with a qualified financial advisor to determine an investment strategy that is suitable for their own personal financial situation and risk tolerance.