As Wall Street enters a crucial week, investors are closely watching the Federal Reserve's final policy meeting of 2025, scheduled for Tuesday. Futures tied to major indices, including the Dow Jones Industrial Average, S&P 500, and Nasdaq 100, have shown modest gains, reflecting cautious optimism. This follows consecutive weeks of positive performance, with the S&P 500 rising 0.3%, the Dow advancing 0.5%, and the Nasdaq Composite increasing by 0.9%. These gains were bolstered by a tame Personal Consumption Expenditures (PCE) reading for September, indicating a muted impact on core expenses. The market's current trajectory suggests a wait-and-see approach as investors anticipate the Fed's decision on interest rates.
In the commodities sector, gold has been on a historic rally, nearing its best annual return since 1979. As of early December, gold futures hovered around $4,240, marking a less than 1% increase for the week and more than $100 off its October record high. This surge is largely driven by investor expectations of a Federal Reserve rate cut, which has put pressure on the US dollar index, lifting commodity prices denominated in the greenback. The World Gold Council reports that momentum has played a significant role in this rally, with central banks continuing their buying spree, keeping demand well above average. Looking ahead, analysts suggest that continued fiscal spending, lower interest rates, and a weaker dollar could support higher gold prices in 2026.
Key Takeaways
- Wall Street anticipates the Federal Reserve's policy meeting on Tuesday.
- Major indices have shown modest gains following consecutive weeks of positive performance.
- Gold is nearing its best annual return since 1979, driven by expectations of a rate cut.
- The World Gold Council reports strong momentum and central bank buying in the gold market.
- Analysts suggest fiscal spending and a weaker dollar could support higher gold prices in 2026.