Stocks, bonds and the dollar barely budged as the Federal Reserve minutes reiterated the central bank’s cautious approach, with traders focused on Nvidia Corp.’s results after this year’s blockbuster rally in big tech. 

In late trading, shares of the world’s most valuable chipmaker whipsawed after its latest forecast failed to meet investors’ sky-high expectations. Revenue in the current period will be about US$20 billion. Though that topped the average analyst estimate of $17.9 billion, some projections reached as high as $21 billion. The bar was set high for Nvidia — which has more than tripled this year — leaving little room for error.

Equities lost steam after the S&P 500’s $6 trillion rally fueled by the artificial intelligence boom, Corporate America’s resilience and bets the Fed will pivot to rate cuts next year. The gains left the index about 5 per cent away from reclaiming its all-time high.

“The stock market is once again priced for perfection,” said Matt Maley, chief market strategist at Miller Tabak + Co. “Since the stock market is more ‘overbought’ right now — than it was ‘oversold’ three weeks ago — investors will need to remain very nimble as we move through the end of November and into December.”

For a market surge that has been predicated squarely on the belief the central bank has completed its hiking cycle and rate cuts are due in 2024, the Fed minutes just underscored the most-recent messaging — officials are still not prepared to declare victory and they have no intention so far to ease policy, according to Quincy Krosby at LPL Financial.

“Today’s sluggish market is a more a function of a short-term overbought market, rather than a market that believes it misinterpreted the Fed,” Krosby noted. “Still, the market believes that the Fed is finished and that the economy will require help with rate cuts in 2024, regardless of the Fed’s messaging.”

Short-term charts on the S&P 500 are currently sporting a negative divergence between price action (approaching recent 2023 highs) and momentum (lower highs), according to Dan Wantrobski, at Janney Montgomery Scott.

“This is a sign that buying power is weakening even as the S&P looks to test into the low-4600 zone,” Wantrobski noted. “Markets are now vulnerable to profit taking/consolidation over the near-term. We also believe they are still vulnerable to elevated volatility/correction within the first half of 2024.”

Hedge funds are holding their most-concentrated wagers on U.S. equities than anytime in the past 22 years, according to data from Goldman Sachs Group Inc. The most popular bets remain in megacap tech, with Microsoft Corp., Inc. and Meta Platforms Inc. in Goldman’s list of “Hedge Fund VIPs” this quarter. 

To Savita Subramanian at Bank of America Corp., the S&P 500 is set for a fresh high in 2024 because U.S. companies have adapted to higher rates and weathered macroeconomic jolts. She sees the gauge at a record 5,000 by the end of 2024. That’s about 10 per cent higher than Tuesday’s close. Next year will be “a stock picker’s paradise,” she said.

U.S. stocks have “much more upside potential” as they approach decisive bullish breakouts, wrote BofA’s technical strategist Stephen Suttmeier. If the S&P 500 could surpass the low 4,600s, it would confirm a “bullish cup and handle” pattern from early 2022 — triggering more gains, he added.

“Our base case is for further modest equity gains in 2024, with the S&P 500 Index ending the year around 4,700,” said Solita Marcelli at UBS Global Wealth Management. “As inflation continues to fall and growth moderates, we are even more positive on quality fixed income. But an unusually wide range of risks could still spoil the outlook.”

Investors held back from a sale of 10-year Treasury inflation protected securities, with demand tempered by this month’s big rally and outflows from exchange traded funds tracking the sector. 

For investors stashing record sums in cash, U.S. bond managers overseeing a combined $2.5 trillion have a bit of advice: It’s time to put that money to work. That’s the message from Capital Group, DoubleLine Capital, Pacific Investment Management Co. and TCW Group.

Signs of ebbing inflation and softer growth have fueled a 3.6 per cent surge in the Bloomberg U.S. Aggregate Index in November, leaving it with a return of about 0.7 per cent for 2023. That’s still well short of what cash has earned this year. But it shows what a real turning point could deliver after a year marked by head fakes over price pressures and Fed policy.

“If people are moving into cash because of 5 per cent rates, we could see that money start trickling back into markets soon. Inflation is coming under control, and the bond market is now preparing for the Fed to start cutting rates in March,” said Callie Cox at eToro.

Corporate Highlights:

  • Lowe’s Cos. cut its forecast, underscoring the shift away from big home-renovation projects after the pandemic boom.
  • Best Buy Co.’s same-store sales fell by more than expected in the third quarter after what the retailer called “uneven consumer demand.”
  • Kohl’s Corp. reported a seventh-straight drop in comparable sales, pointing to an ongoing decline in foot traffic and a broader shift away from consumer spending on discretionary goods like apparel.
  • Abercrombie & Fitch Co. boosted its forecast on the back of stronger-than-expected third-quarter sales as the retro brand’s comeback continues to resonate with teens and young millennials.
  • Dick’s Sporting Goods Inc. raised its profit forecast as strong demand for sports gear overcame concerns of a slowdown in spending ahead of the holiday season.
  • Broadcom Inc.’s deal with software maker VMware Inc. has received a list of conditions it must meet to get approval from Chinese regulators, the final hurdle for the companies’ $61 billion merger.
  • Zoom Video Communications Inc. reported better-than-expected revenue on strong enterprise sales.
  • Ford Motor Co. is reducing capacity and hiring plans at a battery plant it’s building in Michigan because it sees weaker demand for electric vehicles.

Key events this week:

  • Eurozone consumer confidence, Wednesday
  • U.S. initial jobless claims, University of Michigan consumer sentiment, durable goods, Wednesday
  • Bank of Canada Governor Tiff Macklem speaks, Wednesday
  • Eurozone S&P Global Manufacturing & Services PMI, Thursday
  • Thanksgiving holiday — U.S. markets closed — Thursday
  • ECB publishes account of October policy meeting, Thursday
  • Germany IFO business climate, Friday
  • U.S. S&P Global Manufacturing PMI, Friday
  • Black Friday, traditional kick-off for the U.S. holiday shopping season
  • ECB’s Christine Lagarde speaks, Friday

Some of the main moves in markets:


  • The S&P 500 fell 0.2 per cent as of 4 p.m. New York time
  • The Nasdaq 100 fell 0.6 per cent
  • The Dow Jones Industrial Average fell 0.2 per cent
  • The MSCI World index fell 0.2 per cent


  • The Bloomberg Dollar Spot Index was little changed
  • The euro fell 0.3 per cent to $1.0912
  • The British pound rose 0.2 per cent to $1.2536
  • The Japanese yen was unchanged at 148.39 per dollar


  • Bitcoin fell 1.3 per cent to $36,957.33
  • Ether fell 1.6 per cent to $1,992.87


  • The yield on 10-year Treasuries declined two basis points to 4.40 per cent
  • Germany’s 10-year yield declined four basis points to 2.57 per cent
  • Britain’s 10-year yield declined two basis points to 4.10 per cent


  • West Texas Intermediate crude was little changed
  • Spot gold rose 1.1 per cent to $1,999.09 an ounce