Investors Brace for Fed Cut Outcome as Futures Dip and Stock Movers Diverge

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Morning Market Snapshot – Wednesday, December 10, 2025

U.S. equity futures are leaning modestly lower in early Wednesday trade as investors line up for what could be the final Federal Reserve rate cut for a while and a crucial update on the path of policy into 2026. S&P 500 futures are down about 0.1 percent, Nasdaq 100 futures are off roughly 0.2 percent, and Dow futures are lower by around 0.1 percent. That leaves sentiment cautious rather than panicked, with markets clearly in “event-waiting” mode.

The Fed is widely expected to deliver a 25 basis point cut later today, which would bring the target range down to 3.50 to 3.75 percent. Futures markets are assigning roughly an 89 percent probability to that move, but only about a one-in-five chance of another cut as soon as January. The real action will be in the Summary of Economic Projections and Chair Powell’s press conference, where traders hope to get clarity on how many cuts might come in 2026. A Reuters preview notes that investors are increasingly skeptical that the Fed will be able to maintain a lengthy cutting cycle while inflation remains sticky and global central banks turn more hawkish.

Tuesday’s cash session ended with a whiff of fatigue. The S&P 500 slipped 0.09 percent, the Dow fell 0.38 percent, while the Nasdaq managed a 0.13 percent gain, as banks weighed on the market and traders paused after a strong run into record and near record territory for major indexes. The backdrop is still one of resilience, helped by AI related earnings and infrastructure spending that have pushed growth and chip names back toward the front of the leadership pack.

In the pre-market, the tone is mixed beneath the surface. On one side, GE Vernova is surging after a bullish dividend hike, buyback expansion, and upbeat long term guidance, exemplifying the way AI linked power and grid spending is feeding into industrial demand. On the other side, pockets of consumer discretionary and meme adjacent names, including GameStop and Cracker Barrel, are trading sharply lower after earnings related disappointments.

For traders, the message into the opening bell is straightforward. Today is about three things: the size of the Fed cut, the tone of the forward guidance for 2026, and whether AI and rate cut optimism can keep volatility contained once the headlines start hitting the tape. Until then, expect choppy, low conviction positioning with an asymmetric risk that any hawkish surprise from Powell could outweigh a well telegraphed cut.

Pre-Market News Catalysts

GE Vernova (GEV)
Shares are up close to 8 to 10 percent in pre-market trading after the company doubled its dividend to 50 cents, expanded its buyback program to 10 billion dollars, and delivered upbeat 2025 and 2026 guidance that underscores strong demand for grid and AI related power infrastructure.
Lifetime Brands (LCUT)
The housewares and consumer goods company is up about 12.1 percent in pre-market trading around 5.18 dollars, leading a basket of consumer discretionary gainers. The move comes without a single headline driver, but Benzinga highlights the stock as a notable gainer within a group that is otherwise dominated by smaller, higher beta names.
GameStop (GME)
GameStop is down roughly 6 percent in pre-market trade near 21.70 dollars after its latest quarterly update disappointed investors. Benzinga notes that the stock is one of the biggest losers in the consumer discretionary space this morning following the earnings release.
Cracker Barrel (CBRL)
Cracker Barrel shares are lower by more than 7 percent pre-market as the company’s first quarter earnings undershot expectations and management reiterated a cautious outlook. Benzinga flags the name among the heaviest pre-market losers, with traders questioning the pace of any turnaround in traffic and margins.

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

The Bull Case: Stabilizing Inflation, Fed Cut Tailwind, and AI Momentum

The Bull Case: Optimists argue that today’s Fed decision could reinforce a relatively benign macro backdrop where inflation is moderating, growth is slowing but not collapsing, and policy makers are prepared to lean gently against downside risks. Reuters notes that futures markets price roughly an 89 percent chance of a 25 basis point cut today, which suggests a strongly telegraphed and largely consensus move rather than a shock. Bulls see that as an opportunity for the Fed to validate the easing that has already occurred in bond yields without reigniting inflation fears.

From an equity standpoint, the bull camp emphasizes that the S&P 500 remains close to record highs and that the recent pullback has been modest, with Tuesday’s decline of only 0.09 percent framed as a healthy pause after a strong run. They point to the strength in the Russell 2000 and AI linked segments as evidence that breadth and risk appetite are improving rather than narrowing. For this group, AI is not just a story about a handful of megacaps. It is increasingly an infrastructure, utilities, and industrial demand story, which is showing up in the positive reaction to GE Vernova’s long term outlook and dividend actions this morning.

Another element of the bull thesis is positioning. Several strategists quoted in recent weeks by major outlets have argued that investors remain underexposed to equities after the volatility of 2025, which leaves room for further inflows if the Fed signals a controlled easing glide path into 2026. If Powell acknowledges lingering risks but points to a base case of gradually lower rates and steady growth, bulls expect cyclical sectors and small caps to continue to catch up. In that scenario, today’s modest pre-market weakness in futures would simply set the stage for a “relief rally” into the close and potentially a renewed push toward new highs as rate uncertainty fades.

The Bear Case: Hawkish Path Risk, Valuation Stretch, and AI Fatigue

The Bear Case: Skeptics focus less on the fact of a Fed cut and more on what comes after. Reuters and other outlets emphasize that while markets are nearly certain of a 25 basis point reduction today, they are much less confident about the trajectory beyond December. Futures currently imply only a 21 percent chance of another cut in January, reflecting concerns that the Fed will need to keep policy restrictive for longer to ensure inflation is fully contained. If Powell leans into that narrative, bears expect the market to treat today’s move as a “one and done” adjustment rather than the start of an extended easing cycle.

Valuations are another source of anxiety. The S&P 500 sits near record territory after a powerful rally driven largely by AI and mega cap tech, while earnings revisions in several non AI sectors have been more muted. A Reuters analysis on AI and the real economy warns that the artificial intelligence boom has increasingly masked underlying macroeconomic fragilities in 2025, and that the same theme could cut the other way in 2026 if growth disappoints. Bears worry that any hint of a slower or shallower rate cutting path could prompt a de-rating in richly valued growth names.

Under the surface, today’s pre-market action also offers ammunition for skeptics. Consumer facing names like GameStop and Cracker Barrel are trading sharply lower after earnings, suggesting that the reality of post stimulus consumption and traffic trends is still uneven. At the index level, S&P, Nasdaq, and Dow futures are all modestly lower heading into the open, which Investopedia and Reuters attribute to nerves ahead of the Fed decision rather than any fresh positive catalyst. For bears, this is what late cycle risk looks like. Policy support may be near its limit, AI enthusiasm may already be priced in, and the market could prove vulnerable to even small disappointments in the Fed’s language or in the next leg of earnings.

The Strategic Takeaway

The single most important thing for traders to keep in mind as the opening bell approaches is that the market is trading the Fed’s path, not just today’s cut. With an almost fully priced 25 basis point reduction, there is very little incremental information in the headline rate move itself. The real signal will come from the updated dot plot, any revisions to growth and inflation projections, and Chair Powell’s framing of how much “insurance” the Fed believes it has delivered for 2026.

In practice, that means short term volatility is likely to cluster around rates sensitive assets, AI heavy indices, and crowded trades in megacap growth. The combination of cautious global sentiment, modestly weaker futures, and mixed stock specific moves in names like GE Vernova, GameStop, and Cracker Barrel tells you that investors are already trying to position for both relief and disappointment.

For intraday decision making, the strategic edge lies in scenario planning. Traders should map out how they expect equities, yields, and the dollar to behave under a more hawkish or more dovish set of dots, and decide in advance which sectors they are willing to buy on a dip or trim into a spike. Today rewards preparation more than prediction.

Upcoming Session Outlook with Directional Bias

Heading into the U.S. cash open, the balance of signals points to a cautious, Fed dependent tape. Index futures are modestly in the red, with S&P 500, Nasdaq 100, and Dow contracts all down between about 0.1 and 0.2 percent in the pre-market. That weakness is not severe enough to indicate a broad de risk move, yet it sits uncomfortably alongside a global backdrop in which stocks in Europe and Asia have already shown signs of fatigue ahead of the decision.

Within sectors, today’s early winners and losers suggest a market that is still differentiating based on fundamentals. GE Vernova’s nearly double digit pre-market gain reflects investors rewarding clearer capital return and long term guidance, while names like GameStop and Cracker Barrel absorb punishment for underwhelming earnings and outlooks. That mix usually aligns with a session defined by cross currents rather than broad, one way flows.

The key question is how much of that nuance survives once the Fed headlines hit. If Powell delivers a cut paired with even slightly hawkish forward guidance, intraday swings could quickly overwhelm the relatively orderly pre-market. Conversely, a more dovish tone could flip the script and turn small losses into a late day rally. Until that clarity arrives, the most reasonable base case is that the market trades sideways to slightly weaker, with elevated sensitivity to every word from the Fed.

Directional bias into the open: Slightly Bearish, with high event driven volatility risk.

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.