Stock Market Futures Flat Before Key Inflation Data

Ever have one of those evenings where the entire financial world seems to be holding its breath?

That was Thursday night. Stock futures barely twitched, traders grabbed an early dinner, and everyone’s eyes were glued to tomorrow’s calendar. We’re about to get fresh inflation numbers, delayed consumer spending data, and the final revisions to sentiment surveys. In short, the kind of cocktail that can make or break the Santa Claus rally everyone’s quietly hoping for.

I’ve been watching markets long enough to know that these “quiet” nights are usually the calm before something interesting happens.

A Market Walking on Eggshells

Let’s be honest – the price action this week has been about as exciting as watching paint dry. The S&P 500 is up a whopping 0.1% for the week. The Dow is clinging to a 0.3% gain like it’s the last lifeboat on the Titanic. Only the Nasdaq is showing any real life, up almost 0.6%, thanks to the usual tech suspects.

But beneath the surface, there’s a lot more going on. Traders have pushed the probability of a December rate cut to 87% according to futures pricing – that’s a huge swing from just a couple of weeks ago when most people were convinced the Fed would stand pat.

So what changed? Mixed signals, mostly.

The Labor Market: Strong, But Cracks Are Showing

On one hand, weekly jobless claims just hit their lowest level since September 2022. That’s the kind of number that normally makes Fed officials smile and talk about “maximum employment.”

On the other hand, a separate report showed announced job cuts have now topped one million for the year – the highest since the pandemic. Companies are citing everything from corporate restructuring to artificial intelligence to potential tariffs as reasons for trimming staff.

It’s the classic “low hire, low fire” environment that’s kept unemployment steady but growth sluggish. The question is whether that balance is finally tipping.

“The data is mixed that we’re getting, and you’re seeing different signals. Inflation is still sticky where it is… 2026 is a wild card as it pertains to inflation. No one has that crystal ball.”

– Chief Investment Strategist on national television, December 4

Tomorrow’s Big Number: PCE Inflation

Everyone remembers CPI, but the Federal Reserve actually cares more about the Personal Consumption Expenditures price index. That report drops Friday morning, along with September personal income and spending numbers that were delayed because of the government shutdown drama.

Why does this matter so much? Because if core PCE comes in above 0.3% month-over-month or stays stubbornly near 2.7% year-over-year, that 87% probability of a rate cut could drop fast. The Fed has made it clear: they’re data-dependent, and right now the data is sending conflicting postcards.

In my experience, markets hate uncertainty more than bad news. A surprisingly hot inflation print could trigger a sharp sell-off, especially in rate-sensitive sectors like tech and small caps.

Tech Still Carrying the Torch

While the broader market snoozes, Big Tech continues to do the heavy lifting. Meta shares jumped 3.4% Thursday, Nvidia added another 2.1%, and the “Magnificent Seven” trade shows no signs of slowing down.

That’s created a market of haves and have-nots. The equal-weighted S&P 500 is actually slightly down for the week, meaning gains are concentrated in a handful of mega-cap names. Classic late-cycle behavior, or just the new normal in an AI-driven economy? Time will tell.

• Nasdaq Composite: 8 winning sessions out of the last 9
• Meta: best day in weeks
• Nvidia: quietly approaching all-time highs again
• Small caps (Russell 2000): barely positive for December

What I’m Watching Friday Morning

Here’s my personal checklist when the data hits:

1. Core PCE month-over-month – anything 0.3% or higher and rate-cut odds drop sharply
2. Personal spending – were consumers still spending in September, or did shutdown fears cause pulling back?
3. University of Michigan sentiment – final December read, inflation expectations component is critical
4. VIX reaction – if volatility spikes above 16 on a hot print, look out below

Perhaps the most interesting aspect? The Fed meets in less than two weeks, and Chair Powell has repeatedly said they can be patient. But markets have already priced in cuts starting almost immediately. Someone’s going to be wrong.

Positioning for Whatever Comes Next

I’ve learned over the years that trying to predict the exact reaction to economic data is a fool’s game. What you can do is prepare for multiple outcomes.

Right now, I’m keeping powder dry. Cash levels are a bit higher than usual, and I’ve trimmed some tech exposure earlier this week (not because I think the rally is over, but because concentration risk feels real). If we get a soft inflation print, I’ll likely add back to quality growth names. If it’s hot, defensive sectors and short-duration bonds start looking attractive.

The beautiful thing about markets? They’re always teaching you something. This week, they’re teaching patience.

So here we are. Futures flat, volumes light, everyone waiting for tomorrow’s numbers like kids on Christmas Eve. Will we get the rate-cut gift we’re hoping for, or coal in the form of sticky inflation?

My money’s on volatility – one way or the other, next week is going to be interesting.

See you on the other side of the data.