US stocks lose momentum as markets await Fed decision

US equities surrendered early gains on Monday, with the S&P 500 and Dow Jones each slipping around 0.20%, while the Nasdaq hovered near the flatline. Markets struggled to find direction as investors balanced the likelihood of a Federal Reserve (Fed) rate cut on Wednesday against lingering uncertainty over the policy outlook for 2026. Persistently high inflation has strengthened the case for a more cautious approach from policymakers, keeping sentiment fragile ahead of the updated FOMC economic projections. Adding to the week’s focus, attention will also turn to tech valuations, with earnings due from Broadcom and Oracle.

The rand was little moved on Monday as traders absorbed Moody’s decision to maintain South Africa’s credit rating and outlook, while looking ahead to key data releases expected to shed light on early fourth-quarter demand and output trends. By 12h52 GMT, the rand stood at 16.9675 to the dollar, about 0.20% weaker than Friday’s close. On the Johannesburg Stock Exchange, the Top-40 index was last down 1%, while South Africa’s benchmark 2035 government bond was broadly steady, with the yield at 8.405%.

In the UK, London’s FTSE 100 closed roughly 0.30% lower at 9 641 - the weakest level since 25 November - extending losses from the previous session. Traders remained firmly focused on the upcoming US Fed policy announcement, while also awaiting a series of domestic releases due on 12 December, including GDP, industrial production and trade data. Among individual stocks, Barratt Redrow lagged the index, falling 3.80% after Citigroup cut its target price to 506p from 530p.

Across the Eurozone, the STOXX 50 finished Monday broadly unchanged at 5 725 points, while the wider STOXX 600 edged down 0.10%. Investor caution prevailed ahead of a pivotal week for global central banks, led by the Fed meeting. The Fed is widely expected to deliver a 25-basis-point rate cut, but uncertainty over its 2026 policy path has heightened interest in the accompanying FOMC projections. In Europe, ECB policymaker Isabel Schnabel signalled she was comfortable with market expectations that the central bank’s next move could be a rate rise.

In Asia, Japan’s Nikkei 225 gained 0.27% to 50 582, while the Topix advanced 0.65% to 3 384, recovering part of the previous session’s losses as robust expectations of a US rate cut supported sentiment. In China, the Shanghai Composite rose 0.54% to 3 924 and the Shenzhen Component climbed 1.39% to 13 330, with mainland markets reaching multi-week highs amid renewed optimism surrounding Chinese technology and AI firms.

In commodities, WTI crude futures hovered around $60 per barrel on Monday, near a more-than-two-week high, buoyed by geopolitical tensions and expectations of a forthcoming US interest rate cut. Gold prices climbed back above $4 200 per ounce after a weekly decline, as traders awaited the Fed’s final policy meeting of the year, where officials are widely anticipated to cut rates.