Wall Street is in a risk-on mood as it waits for Powell to deliver on the ‘Fed put’ | Fortune

Today, markets couldn’t look more different. 

Futures in the S&P 500 were pointing up this morning, suggesting that investors are pretty happy with yesterday’s market close when the index gained 0.23% and set yet another record high. Traders seemed to be buoyed by President Trump’s suggestion that he was, finally, ready to do a deal with China and that he would be discussing Nvidia’s Blackwell chips as part of that deal.

Trading is pretty much on hold today as investors wait for U.S. Federal Reserve Chairman Jerome Powell to announce that he will, as expected, deliver a 0.25% cut to interest rates, bringing them down to the 3.75% level. 

Powell had better deliver: 99.9% of betters on Fed Funds futures have priced in the cut already, according to CME FedWatch. This is “the Fed put,” according to Goldman Sachs.

“After the ‘Liberation Day’ sell-off, markets shifted towards a Goldilocks regime based on less pessimistic growth expectations helped by a resilient corporate sector and more dovish Fed expectations due to a weak U.S. labour market. However, since October the Goldilocks regime has been ‘”tested,’” due to declining risk appetite, Christian Mueller-Glissmann and his team told clients this morning. “Earlier this month, markets shifted more towards a ‘central back put’ regime.” 

As usual, the Fed announcement, Powell’s speech, and his answers in the Q&A that follows will be closely parsed to see what words he uses—and what words he avoids—when describing the state of the labor market and inflation.

Whatever he says will likely move the market.

That’s because it doesn’t take much to move the market, given how its value is concentrated among a handful of tech stocks with massive market caps. Nvidia, for instance, went up 4.98% after CEO Jensen Huang yesterday downplayed concerns about AI being a bubble, announced new deals with Uber, Palantir, Crowdstrike, and Nokia, and said the company was moving into quantum computing.

In fact, yesterday most stocks either fell or closed flat, according to Deutsche Bank. “There were only 104 advancers in the S&P 500, the fewest in over two weeks, and actually the fewest on an up day as far back as my data on advancers and decliners goes (to 1990). So remarkable,” Jim Reid and his team at Deutsche Bank told clients.

Here’s a snapshot of the markets ahead of the opening bell in New York this morning:

• S&P 500 futures up 0.17% this morning. The last session closed up 0.23%. 
• STOXX Europe 600 was up 0.17% in early trading. 
• The U.K.’s FTSE 100 was up 0.49% in early trading. 
• Japan’s Nikkei 225 was up 2.17%. 
• China’s CSI 300 was up 1.19%. 
• The South Korea KOSPI was up 1.76%. 
• India’s NIFTY 50 was up 0.45%. 
• Bitcoin was at $113K.