The Paris stock exchange has now recorded its twelfth consecutive session of muted volatility, slipping 0.4% to around 8,020 points with the 8,030 mark acting as a pivot. Technically, the CAC40 has exited its 8,050/8,150 corridor, breaking through the lower bound.
However, the same cannot be said for the Euro-Stoxx50 (down 0.2% to 0.3%), which shows no clear bearish signals, nor for the DAX or BEL-20 (down 0.25%, falling back below 5,000 points).
On Wall Street, it was another session of stagnation: the Nasdaq closed down 0.2%, the S&P500 was flat, and the Dow Jones gained 0.3% (after losing 0.5% the previous day). The S&P500 has been stuck between 6,800 and 6,880 since November 26, marking 15 days of complete stagnation--seemingly paralyzed by anticipation over the message to come from the US Federal Reserve.
According to analysts, this prolonged pause does not necessarily signal a loss of upward momentum, but rather logical profit-taking after a rapid rally led by technology, consumer goods, and semiconductors, which pushed Wall Street to record levels this autumn.
"Market conditions on the eve of an FOMC meeting are never very lively," reminds Michael Brown, strategist at Pepperstone. "Those preceding the December meeting, when everyone is starting to prepare for year-end holidays, are even quieter," he adds.
While the Federal Reserve's third rate cut in three months is all but certain, the key question is whether the Fed will signal a continuation of its monetary easing cycle into early 2026.
The US central bank's statement, due at 8:00 p.m., will be accompanied by the institution's latest economic projections and followed by a press conference from Chairman Jerome Powell.
Given the persistent differences of opinion within its governing committee in recent months, investors expect a "restrictive" rate cut--one motivated more by caution in light of recent labor market deterioration than by the need to support US growth, which remains robust.
Many observers also anticipate that Powell will try to temper expectations for further rapid rate cuts next year, following the three consecutive easings since September.
While tonight's expected rate cut could be the last for some time, it seems likely that Powell will avoid derailing financial markets and will phrase his comments delicately and reassuringly, in order to maintain investor confidence after what has been a highly successful trading year.
"If the Fed sends a more dovish signal than anticipated, the market could quickly regain momentum and retest its historic highs," notes Linh Tran, a market analyst at XS.com.
"Conversely, if the tone of his speech is overly cautious, the S&P 500 may continue its gentle consolidation, awaiting new catalysts," she warns.
One indicator to note: bond markets have been deteriorating, and quite sharply since the end of November. Any improvement has lasted only a few hours. This morning, the yield on US 10-year T-bonds hit 4.51% before sliding back to 4.18% (down 1 basis point), while the 2-year note is now fluctuating between 3.625% and 3.605% (down 0.8 basis points).
In Europe, French OATs are weakening by 1.6 basis points to 3.5800%, German Bunds by 1 basis point to 2.8620%, and Italian BTPs by 1.5 basis points to 3.568%.
The euro is gaining 0.1% to 1.1640, while Bitcoin slips 1% to $91,750.
On the energy front, oil prices are back near their lows, with Brent down 0.9% to $61.50 and WTI down 0.8% to $57.80 on the NYMEX.
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