The IBEX 35 opened Monday with little change, following a bullish streak last week that saw it surpass its all-time highs and break through the 16,700-point barrier.

Market sentiment remains cautiously optimistic, as both equities and bonds are pricing in a rate cut in the United States this Wednesday. This follows an uneventful inflation report on Friday, while investors sharpen their focus for any clues about the Federal Reserve's next moves and the tone of its internal deliberations.

According to LSEG's IRPR tool, futures indicate an almost 86% probability of a 25-basis-point cut to the Fed's benchmark rates. As a result, any decision to hold rates steady would trigger significant market turmoil.

Nevertheless, recent signals suggest the meeting could be one of the most eventful in recent years: at least two of the 12 voting members may dissent, and up to nine of the 19 participants could reflect opposition to a December cut in the "dot plot"--the chart showing where Fed members expect interest rates to be in the coming years. The Fed has not recorded three or more dissenting views in a meeting since 2019.

"We will probably see the dot plot reflecting more rate cuts for 2026... We believe this time it will show two, or even three additional cuts in 2026," said Juan Moreno Martínez de Lecea, financial and markets analyst at Bankinter.

"It is true that (Fed Chair Jerome) Powell could strike a somewhat more hawkish tone in the subsequent press conference, but the reality is that his statements will gradually lose weight as his departure from the Fed approaches, which is set for May 2026," he added in a video with his weekly market analysis.

Central bank meetings in Canada, Switzerland, and Australia are also drawing attention this week. The consensus is that rates will remain unchanged; in the case of the Swiss National Bank, the scope for further easing to counter the strength of the franc is limited, as rates are already at 0%, and the institution is reluctant to return to negative rates.

In Europe, questions about the European Central Bank's next move have resurfaced after Governing Council member Isabel Schnabel told Bloomberg News that the next decision could be a hike--not a cut--though not imminently.

On the corporate calendar this week, investors are awaiting results from Oracle and Adobe on Wednesday, December 10, and from Costco and Broadcom on Thursday, December 11.

At 0805 GMT on Monday, Spain's IBEX 35 index was down 26.40 points, or 0.16%, at 16,662.10, while the pan-European FTSE Eurofirst 300 index slipped 0.05%.

In the banking sector, Santander lost 1.08%, BBVA fell 0.34%, Caixabank gained 0.06%, Sabadell dropped 0.12%, Bankinter slipped 0.15%, and Unicaja Banco was little changed.

Among major non-financial stocks, Telefónica declined 0.54%, Inditex was down 0.18%, Iberdrola rose 0.17%, Cellnex slipped 0.39%, and oil company Repsol climbed 0.68%.

(Reporting by Tomás Cobos; editing by Benjamín Mejías Valencia)