US Stock Market Outlook: Fed Divergence, Unclear Rate Cut Prospects, Bitcoin Drops Below $96K.

Market Overview

On Friday morning, U.S. stock index futures fell collectively amid increasing divergence among Federal Reserve officials regarding interest rate cuts in December. The Dow futures dropped by 0.56%, Nasdaq futures fell by 1.19%, and S&P 500 futures decreased by 0.76%.

Pre-Market Movements

Major Tech Stocks

Most major tech stocks saw declines in pre-market trading. Tesla (TSLA) fell over 3%, while Nvidia (NVDA) and AMD dropped more than 2%. Google (GOOGL) and Meta Platforms (META) were down over 1%.

Chinese Stocks

Popular Chinese stocks also faced losses, with Xpeng Motors (XPEV) down over 5%, and Pinduoduo (PDD) and JD.com (JD) falling more than 2%. Alibaba (BABA) and NIO (NIO) were down over 1%, while Bilibili (BILI) rose over 3%.

Cryptocurrency Market

Bitcoin fell below $96,000, with most cryptocurrencies declining in pre-market trading. IREN Ltd (IREN) and Cipher Mining (CIFR) dropped over 9%, while CleanSpark (CLSK) fell over 6%.

Analyst Insights

Nvidia's Performance Concerns

Notable tech investor Gene Munster expressed that Nvidia (NVDA) faces a dilemma ahead of its earnings report. A strong performance forecast could raise concerns about over-investment, while a modest adjustment might signal slowing growth, potentially leading to market volatility. However, he remains optimistic about Nvidia's long-term prospects.

Samsung's Price Hike

Samsung Electronics is reportedly raising server chip prices by 30% to 60%, which could increase costs for large enterprises building data infrastructure and affect prices of smartphones and computers.

Company Updates

Tesla's AI Challenges

Tesla's AI software VP stated that 2026 will be a challenging year for employees in the AI team, emphasizing the ambitious goals set during a recent meeting.

Berkshire Hathaway's Bond Issuance

Berkshire Hathaway (BRK.A) successfully issued bonds worth 210.1 billion yen, reflecting strong credit quality and market demand.

Bridgewater's Nvidia Stake Reduction

Bridgewater Associates reported a 65.3% reduction in its Nvidia holdings, indicating a cautious outlook on the stock's future performance.

TSMC's Capacity Expansion

TSMC is considering increasing its 3nm capacity target in response to strong demand from major AI clients, which could significantly boost its capital expenditures.

Market Sentiment

CoreWeave's Decline

CoreWeave (CRWV) continued to drop over 4% amid concerns about its business model and reliance on Nvidia, as highlighted by a media report.

Warner Bros Discovery Acquisition Interest

Warner Bros Discovery (WBD) shares rose nearly 3% as Paramount, Comcast, and Netflix prepare to bid for the company.

Bilibili's Strong Q3 Performance

Bilibili (BILI) shares increased over 3% following a strong Q3 report, with revenue growth and positive adjustments from major banks.

Applied Materials' Earnings Report

Applied Materials (AMAT) shares fell nearly 6% after reporting a 3% decline in revenue for Q4, despite beating analyst expectations.

Federal Reserve Outlook

The Federal Reserve's decision on a potential rate cut in December is becoming uncertain, with increasing caution among officials due to inflation concerns and a robust labor market.

Economic Impact of Government Shutdown

The White House indicated that the government shutdown could lead to a loss of approximately 60,000 private sector jobs, with economic losses estimated at $15 billion per week.

Upcoming Events

Investors are preparing for significant market volatility on December 10, when the U.S. will release the November CPI report, coinciding with the Fed's interest rate decision.

Conclusion

Morgan Stanley suggests that the current sell-off in U.S. stocks may be entering its latter stages, although market structure remains fragile. The liquidity indicators in the U.S. are showing signs of tightening, prompting speculation about potential new quantitative easing measures.