Federal Reserve minutes to be released soon. Will the US stocks open lower at midday and hold the support?

U.S. stocks weakened again at midday on Tuesday, marking the third consecutive trading day of decline for the S&P 500 index. Market focus has shifted from tech stock sell-offs to the release of the Federal Reserve’s December meeting minutes—which could significantly impact liquidity expectations for 2026.

Major Indices Decline Together, Tech Stocks Remain Under Pressure

The Dow fell 129.97 points (0.27%) to 48,331.96; the Nasdaq dropped 12.92 points (0.06%) to 23,461.43; the S&P 500 declined 5.80 points (0.08%) to 6,899.94.

Behind this sub-1% decline is market caution regarding valuations. The tech sector sell-off from Monday continues to ferment—led by tech stocks, the Nasdaq Composite fell 0.5% on Monday, with the S&P 500 dropping 0.35%. AI concept stocks like Nvidia experienced significant sell-offs, falling over 1%, with Palantir down 2.4%.

Barbara Doran, CEO of BD8 Capital Partners, stated, “The market is worried that the AI bubble is being overinflated.” This sentiment is also reflected in the precious metals market—Silver futures on Monday recorded their worst day since 2021, with gold mining company Newmont closing down 5.6%. However, silver futures prices rebounded sharply on Tuesday, stabilizing after falling from historical highs.

Global Stock Markets Still Poised for Best Performance Since 2019

Despite recent frequent adjustments, the global stock market outlook remains positive on an annual basis. The MSCI Global Equity Index has risen approximately 21% in 2025, potentially marking the best annual performance since 2019.

Mohit Mirpuri, Senior Partner at SGMC Capital in Singapore, believes, “This pullback is more like a healthy correction rather than a trend change.” Historical data also supports this view—according to Bloomberg compiled data, the S&P 500 has averaged a 1.4% increase in January over the past 10 years, with six of those years posting positive gains.

Federal Reserve Policy Signals Shape Market Expectations

The Federal Reserve cut interest rates for the third consecutive time at its December meeting and maintained a forward guidance of only one more rate cut in 2026. However, market traders have priced in more aggressive expectations—anticipating two additional rate cuts by the Fed in 2026.

Analysts suggest that the December Fed minutes could further reinforce market expectations of easing policies. Meanwhile, U.S. President Trump has indicated preferences for a candidate to serve as the next Fed Chair, which could have long-term implications for future monetary policy.

Most Wall Street rate strategists (with few exceptions) expect that even if the Fed continues to cut rates, the 2026 U.S. Treasury yields may remain stable or higher, reflecting complex market outlooks on growth prospects.

Housing Price Growth Rebounds, but Transaction Volumes Remain Low

Data released Tuesday shows U.S. October home prices accelerated nationwide. The S&P CoreLogic Case-Shiller Index indicates a 1.4% year-over-year increase in home prices, up from 1.3% in September. Northeastern cities led the gains, surpassing the traditionally strong Sun Belt metropolitan areas.

Among 20 major U.S. cities, Chicago saw the largest increase (up 5.8% YoY), followed by New York at 5%, and Cleveland at 4.1%. Tampa experienced the largest decline (down 4.2% YoY), with Dallas, Miami, and Phoenix also seeing price drops.

Despite increased inventory of homes for sale nationwide, providing more bargaining power for buyers, few are willing to close deals. Mortgage rates remain above 6%, coupled with recession fears and weakening employment markets, keeping transaction volumes subdued. Nicholas Godec, Head of Fixed Income Trading and Commodities at S&P Dow Jones Indices, said, “October data indicates the U.S. housing market is clearly slowing, and nationwide home prices continue to lag behind consumer inflation.”

Other Asset Trends: Bitcoin Volatility Intensifies

In the crypto space, Bitcoin’s volatility has significantly increased. According to real-time data, Bitcoin is currently priced at $90,540, after briefly surpassing $90,000 in the previous trading day before retracing gains. The dollar index-related indicators have edged lower.

The oil market remains bullish, with traders weighing geopolitical tensions in Venezuela, Russia, and Iran against concerns over global oversupply.

Overall, U.S. stocks face valuation adjustment pressures, but the upward trend for the year remains intact. The key variable is the strength of the policy signals from the Fed minutes.