We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Pre-markets Remain "Wait & See" Ahead of Fed Decision
Read MoreHide Full Article
Key Takeaways
A "Hawkish Cut" Is Expected Today: -25bps on the Fed Funds Rate
Q3 Employment Costs Stepped Back from Expectations
CHWY and JILL Report Ahead of the Bell, ORCL After
Wednesday, December 10, 2025
We again see a flattish board ahead of today’s regular market session, with the Dow, S&P 500 and small-cap Russell 2000 all down single-digits at this hour. The tech-heavy Nasdaq is -38 points currently. We expect this narrow range of trading to continue until at least after today’s Federal Open Market Committee (FOMC) decision on monetary policy and the subsequent press conference with Fed Chair Jerome Powell.
Widely expected to be the third rate cut of 2025, the market has already priced in a -25 basis point (bps) reduction in the Fed funds rate. We expect there will be dissension in both directions on the vote, with more “hawkish” members advocating no change and Fed Governor Stephen Miran very likely voting for a 50 bps cut. In fact, a “hawkish cut” has become the consensus outlook for today’s move on interest rates.
Explaining Today’s “Hawkish Cut”
The issue of the “hawkish cut” perhaps needs some set-up. The main reason the Fed — or, more specifically, Powell and a majority of the FOMC — is reluctant to slash interest rates is because of the inflation question. To this point, we haven’t seen the Inflation Rate rocket up to +9.1% like we did at the height of the Great Reopening, but it’s quite clear the Fed has failed in its mission to bring rates down to +2%.
In fact, the latest CPI Inflation Rate headline we have, from September (due to the government shutdown), is +3.0%. It marked the fifth-straight month where year-over-year CPI rose or was unchanged. The last time we saw a lower Inflation Rate was April of this year, when it went down to +2.3% — the lowest level since February 2021. So inflation has climbed 70 bps from this past spring to the end of summer.
Also keep in mind we’re skipping over the October Inflation Rate and going straight to November, expected a week from tomorrow. And if we notice the jump from July to September — a two-month interval, same as September to November — was +30 bps. Should this be the same jump for the year-over-year CPI, we could see a +3.3% Inflation Rate next Thursday, or 100 bps above where we were this past April.
The story is similar on PCE metrics: +2.8% in September is elevated from the five-months-previous lows of April’s +2.3%. The basic point here is that this is not nothing. From (most of) the Fed’s point of view, slashing rates going into 2026 would be wildly irresponsible. So the growing consensus, following today’s -25 bps drop to a Fed funds rate of 3.50-3.75% for the first time in more than three years, would be to pause in January and focus on the next meeting in March.
Q3 Employment Cost Index Dips to +0.8%
One metric out this morning that does not point to higher inflation is the Employment Cost Index for Q3, which came in at +0.8% — 10 bps lower than the previous quarter and the slimmest since Q3 a year ago. Year over year, +3.5% ECI is also down -10 bps from the prior print. It’s only a subtle change, of course, but at least it’s not stoking the flames of higher inflation overall.
Earnings Roundup: Specialty Retailers & Oracle After the Close
Ahead of today’s open, Chewy (CHWY - Free Report) shares are up +5.8% following favorable Q3 results. Earnings of 32 cents per share outpaced the Zacks consensus by 2 cents, while revenues of $3.12 billion bettered expectations by +0.59%. Despite conservative guidance, the stock is adding to its +4% growth year to date. For more on CHWY’s earnings, click here.
Specialty apparel company J. Jill (JILL - Free Report) trounced expectations on its bottom line, with earnings of 76 cents per share outperforming consensus of 58 cents by +31%. Revenues of $150.53 million, while up +1.57% from estimates, is lower than the $151.26 million reported a year ago. Shares are down again in the pre-market, deepening the company’s -40% drop year to date. For more on JILL’s earnings, click here.
After today’s closing bell, earnings releases continue. These will be headlined by Oracle’s (ORCL - Free Report) fiscal Q2 numbers, which are expected to grow +10.88% on earnings and +14.84% on revenues. Recall a quarter ago Oracle had raised eyebrows with how much excess AI business the tech giant was able to collect.
We’ll also hear from Adobe Systems (ADBE - Free Report) and its fiscal Q4 report out after the close. Earnings growth of +12% in the quarter and revenues up +8.85% are expected. Electronics designer Synopsys (SNPS - Free Report) also reports fiscal Q4 results, expected to come in -17.94% on earnings and +37.6% on revenues.
Image: Bigstock
Pre-markets Remain "Wait & See" Ahead of Fed Decision
Key Takeaways
Wednesday, December 10, 2025
We again see a flattish board ahead of today’s regular market session, with the Dow, S&P 500 and small-cap Russell 2000 all down single-digits at this hour. The tech-heavy Nasdaq is -38 points currently. We expect this narrow range of trading to continue until at least after today’s Federal Open Market Committee (FOMC) decision on monetary policy and the subsequent press conference with Fed Chair Jerome Powell.
Widely expected to be the third rate cut of 2025, the market has already priced in a -25 basis point (bps) reduction in the Fed funds rate. We expect there will be dissension in both directions on the vote, with more “hawkish” members advocating no change and Fed Governor Stephen Miran very likely voting for a 50 bps cut. In fact, a “hawkish cut” has become the consensus outlook for today’s move on interest rates.
Explaining Today’s “Hawkish Cut”
The issue of the “hawkish cut” perhaps needs some set-up. The main reason the Fed — or, more specifically, Powell and a majority of the FOMC — is reluctant to slash interest rates is because of the inflation question. To this point, we haven’t seen the Inflation Rate rocket up to +9.1% like we did at the height of the Great Reopening, but it’s quite clear the Fed has failed in its mission to bring rates down to +2%.
In fact, the latest CPI Inflation Rate headline we have, from September (due to the government shutdown), is +3.0%. It marked the fifth-straight month where year-over-year CPI rose or was unchanged. The last time we saw a lower Inflation Rate was April of this year, when it went down to +2.3% — the lowest level since February 2021. So inflation has climbed 70 bps from this past spring to the end of summer.
Also keep in mind we’re skipping over the October Inflation Rate and going straight to November, expected a week from tomorrow. And if we notice the jump from July to September — a two-month interval, same as September to November — was +30 bps. Should this be the same jump for the year-over-year CPI, we could see a +3.3% Inflation Rate next Thursday, or 100 bps above where we were this past April.
The story is similar on PCE metrics: +2.8% in September is elevated from the five-months-previous lows of April’s +2.3%. The basic point here is that this is not nothing. From (most of) the Fed’s point of view, slashing rates going into 2026 would be wildly irresponsible. So the growing consensus, following today’s -25 bps drop to a Fed funds rate of 3.50-3.75% for the first time in more than three years, would be to pause in January and focus on the next meeting in March.
Q3 Employment Cost Index Dips to +0.8%
One metric out this morning that does not point to higher inflation is the Employment Cost Index for Q3, which came in at +0.8% — 10 bps lower than the previous quarter and the slimmest since Q3 a year ago. Year over year, +3.5% ECI is also down -10 bps from the prior print. It’s only a subtle change, of course, but at least it’s not stoking the flames of higher inflation overall.
Earnings Roundup: Specialty Retailers & Oracle After the Close
Ahead of today’s open, Chewy (CHWY - Free Report) shares are up +5.8% following favorable Q3 results. Earnings of 32 cents per share outpaced the Zacks consensus by 2 cents, while revenues of $3.12 billion bettered expectations by +0.59%. Despite conservative guidance, the stock is adding to its +4% growth year to date. For more on CHWY’s earnings, click here.
Specialty apparel company J. Jill (JILL - Free Report) trounced expectations on its bottom line, with earnings of 76 cents per share outperforming consensus of 58 cents by +31%. Revenues of $150.53 million, while up +1.57% from estimates, is lower than the $151.26 million reported a year ago. Shares are down again in the pre-market, deepening the company’s -40% drop year to date. For more on JILL’s earnings, click here.
After today’s closing bell, earnings releases continue. These will be headlined by Oracle’s (ORCL - Free Report) fiscal Q2 numbers, which are expected to grow +10.88% on earnings and +14.84% on revenues. Recall a quarter ago Oracle had raised eyebrows with how much excess AI business the tech giant was able to collect.
We’ll also hear from Adobe Systems (ADBE - Free Report) and its fiscal Q4 report out after the close. Earnings growth of +12% in the quarter and revenues up +8.85% are expected. Electronics designer Synopsys (SNPS - Free Report) also reports fiscal Q4 results, expected to come in -17.94% on earnings and +37.6% on revenues.
Questions or comments about this article and/or author? Click here>>