Weekly US Stock Index Futures Review and Outlook: What Investors Should Focus On

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Last week, due to mixed employment data and core inflation in line with expectations, the market entered consolidation ahead of the Federal Reserve’s interest rate meeting. The three major US stock index futures showed mixed movements, reflecting cautious investor sentiment.

This week’s market focus will be entirely on the Federal Reserve’s interest rate decision and its policy statement. This decision will provide decisive guidance for the short-term market direction, and investors need to pay close attention.

Key Points

• The market remains on hold ahead of the Federal Reserve meeting, with investors awaiting policy guidance.
• The Federal Reserve’s interest rate decision will be key to this week’s market movements.
• Inflation data met expectations, and the market generally believes the Federal Reserve will hold rates steady.
• Investors should focus on the Federal Reserve’s statements on future policy and Chair Powell’s remarks.
• Technical analysis shows the market in consolidation, with key support levels important for the market.

Last Week’s Market Review: Data and Performance

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Last week, key economic data became the main driver of market movements. While investors digested this information and prepared for this week’s Federal Reserve meeting, the market overall showed a consolidation pattern.

Macro Review: Employment and Inflation Data Interpretation

On the macro front, the market received two important reports: employment data and inflation data.

First, the employment report released by the US Department of Labor was better than expected. Nonfarm payrolls in September increased by 119,000, far exceeding the market’s expected 50,000, marking the largest job growth in five months.

Overview of US Employment Data for September 2025

Indicator	Actual	Expected	Previous (Revised)
Nonfarm Payrolls	119K	50K	-4K
Unemployment Rate	4.3%	4.3%	4.3%
Average Hourly Earnings MoM	0.3%	0.3%	0.3%

Second, inflation data showed signs of continued cooling. As the Federal Reserve’s preferred inflation measure, the core Personal Consumption Expenditures (PCE) price index grew 2.8% year-over-year in September, lower than the previous 2.9%. This data met market expectations, strengthening confidence that the Federal Reserve will hold rates unchanged.

Index Performance: Dow, S&P, and Nasdaq Futures Trends

Against the backdrop of mixed data, major US stock index futures showed mixed movements last week, with the market lacking clear direction. Dow Jones Industrial Average futures closed slightly higher, while S&P 500 futures and Nasdaq 100 futures fell modestly. This divergent performance reflected investors’ generally cautious wait-and-see attitude ahead of the key Federal Reserve interest rate decision, with relatively light trading volume.

Sector Rotation: Key Sector Strength and Weakness Analysis

From the S&P 500 sector performance, internal market divergence was evident. The Information Technology sector was the only one to record significant gains last week, while most other sectors declined.

This clear strength and weakness pattern indicated that funds flowed into large tech stocks for safe haven last week, while cyclical sectors more sensitive to economic prospects, such as materials and consumer discretionary, faced greater selling pressure.

US Stock Index Futures This Week Outlook: Focus on Fed Decision

This week, all market participants’ attention will be on the Federal Reserve’s monetary policy meeting. The outcome of the meeting, especially the wording in the policy statement and Chair Powell’s remarks, will directly impact short-term volatility in US stock index futures.

Core Event: Federal Reserve Interest Rate Decision Outlook

The market generally expects the Federal Reserve to hold rates unchanged at this meeting. This expectation is mainly based on recent inflation data meeting expectations, giving policymakers more time to assess the lagged effects of past rate hikes on the economy.

Therefore, the market’s focus will shift from “whether to hike rates” to “future policy path.” Investors need to carefully interpret every detail in the post-meeting statement and Chair Powell’s press conference.

Analysts will focus on the following areas for clues to judge the Federal Reserve’s true policy stance:

• Inflation Target: Any statements about “aiming for inflation moderately above 2% for some time after sustained periods below 2%.”
• Employment Assessment: How the statement describes labor market conditions and whether it reiterates “no reaction to strong employment data without inflation pressure.”
• Policy Approach Shift: Observe if the policy description shifts from “opportunistic reflation” to a more “prudent” approach.

In addition, analysts will closely watch the use and evolution of “forward guidance”. Federal Reserve Chair Powell stated after the July 2022 meeting that the Fed would “make decisions meeting by meeting” and would not provide the clear guidance of the past. The European Central Bank expressed similar views, hoping to maintain policy flexibility. If the Federal Reserve continues to downplay forward guidance at this week’s meeting, it means increased policy uncertainty for the market in the future.

Economic Calendar: Other Important Data Releases

In addition to the Fed decision, several important economic data points this week are worth watching. These data will provide more clues about the health of the US economy.

Note: Retail sales data originally scheduled for November has been rescheduled to December 16.

Initial jobless claims is a leading indicator for observing labor market conditions. Last week’s 191K was far below expectations, showing the labor market remains tight. Whether this week’s data continues this trend will influence market expectations for future wage inflation. Meanwhile, retail sales data directly reflects consumer spending willingness and is key to judging economic resilience.

Earnings Front: Key Companies to Watch

This week is not peak earnings season, with most reports from small- and mid-cap companies. Nevertheless, some company reports can still provide insights into specific industries.

Among them, luxury homebuilder Toll Brothers (TOL)’s performance will reveal real demand in the real estate market under high interest rates. Investors can gain insight into the health of the real estate industry from its order volume and future outlook guidance.

Technical Analysis and Key Levels

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Ahead of the key Federal Reserve decision, the technical side also reflects the market’s consolidation and wait-and-see sentiment. By analyzing the technical patterns, key levels, and sentiment indicators of major index futures, investors can better prepare for potential market volatility.

Major Index Technical Pattern Analysis

From technical indicators, the market is sending complex signals. Taking Dow futures as an example, its short-term and long-term moving averages show divergence.

This combination of short-term bearish and long-term bullish typically reflects the current market’s indecision in direction selection.

For the tech-heavy Nasdaq 100 futures, indicators on the 4-hour chart also show signs of weakening momentum:

• Relative Strength Index (RSI): The indicator shows bearish divergence, with price making new highs but RSI failing to follow, suggesting weakening upside momentum.
• Moving Average Convergence Divergence (MACD): Although the indicator line remains above the signal line, the histogram height is shortening, indicating slowing bullish momentum.

Key Support and Resistance Level Judgment

Clearly identifying key support and resistance levels is crucial for formulating trading strategies.

S&P 500 Futures technical outlook largely depends on defense of key support. According to Fibonacci retracement analysis, the 4800-4834 area is an important support zone, representing the 50% retracement of the rise from the 2022 low to the 2025 high. As long as price holds above this area, the overall technical pattern remains bullish.

For Nasdaq 100 Futures, upside resistance levels are clearer.

If Nasdaq 100 futures successfully break resistance near 26,900, it will open space to challenge higher targets.

Market Sentiment Indicators: VIX and Fed Watch Interpretation

Market sentiment is an important supplement to technical analysis. The Chicago Board Options Exchange Volatility Index (VIX), known as the “fear index,” is a key tool for measuring market expectations.

As of December 8, the VIX reading was 16.66, still at a historically relatively low level below 20, but up from last week’s low of 15.41, showing rising risk-aversion sentiment ahead of the Fed meeting.

Meanwhile, the CME FedWatch Tool shows the market is nearly 100% certain of no change at this meeting. Therefore, the slight VIX rise is not due to hike concerns but vigilance over future policy path uncertainty. Overall, this week’s US stock index futures movements will be entirely dominated by Federal Reserve policy signals.

Reviewing last week, the market consolidated after key data releases. Looking ahead to this week, all eyes are on the Federal Reserve’s interest rate decision, with its policy statement providing decisive guidance for short-term US stock index futures direction. Despite short-term uncertainty, economic resilience and corporate earnings growth provide a solid foundation for the market.

Overall, market volatility this week is expected to amplify significantly. Investors are advised to remain cautious before the decision, referencing key support near 4800 for S&P 500 futures. After the decision, market direction will be clearer, allowing for trend-following actions.

Regardless of the outcome, investors should adhere to established risk management principles and steadily respond to market changes.

FAQ

Why is this week’s Federal Reserve decision so critical?

The Federal Reserve’s interest rate decision directly affects future borrowing costs and economic expectations. This decision will provide clear signals on monetary policy direction, thereby determining short-term valuations and direction for risk assets like stocks.

What does a rising VIX fear index mean?

The VIX measures market expectations for volatility over the next 30 days. Its rise usually indicates rising investor risk-aversion and increased market uncertainty. Investors are preparing for potentially larger price swings.

Why is 4800 important for S&P 500 futures?

4800 is a key technical support level for S&P 500 futures. Holding this level means the bullish trend may continue. A break below could signal a deeper correction.

What is the main trading strategy before the Fed announces the decision?

The core strategy is to remain cautious. Given outcome uncertainty, aggressive bets carry high risk. Investors may consider reducing positions or hedging, waiting for clearer direction after the decision.