With a year-end Federal Reserve interest rate cut back in play, the trickle of backlogged U.S. economic data turns into a torrent on Tuesday as markets get a better take on the U.S. consumer ahead of the Thanksgiving holiday.
Fed easing hopes have zoomed higher since New York Fed boss John Williams nodded late Friday to another cut next month. Futures markets now see a more than 70% chance of a move in December compared with a 1-in-4 chance just a week ago.
The shift in expectations dragged Treasury yields lower and sparked another hefty rally of more than 1% in Wall Street stock indexes on Monday. Stock futures have stepped back a touch overnight, however, as some major health checks on the U.S. consumer are due to hit later on Tuesday.
Long-delayed September retail sales and producer price data are released alongside a more up-to-date taken on consumer confidence this month. And with 'Black Friday' sales also on the radar, Best Buy reports earnings.
The Fed's focus lately has been on the extent of softness in the labor market - with a mixed picture on that in the most recent payrolls update. But Williams' intervention on Friday also indicated that he saw still elevated inflation as temporary and producer price readings on Tuesday will help color thinking on the Fed's favored personal consumption expenditures inflation gauge for the same month.
The Fed Board's resident dove and Fed Chair hopeful Christopher Waller backed another rate cut next month. So did San Francisco Fed chief Mary Daly.
All of which has helped repair market sentiment after last week's jarring tech-related selloff.
But it was far from plain sailing in the increasingly volatile Big Tech and AI megacaps.
As Tokyo returned from Monday's holiday, tech giant Softbank shares plunged 10%, even though Japan's Nikkei index clung to positive territory. Shares of Alphabet jumped 3% premarket after The Information reported the firm was in talks with Meta Platforms to supply AI chips, a move that's seen AI-chip behemoth Nvidia's stock drop 3% ahead of Tuesday's bell as the rivalry was eyed.
And with attention still on the scale of AI-related investment frenzy, Amazon said it plans to invest $15 billion in Northern Indiana data centers - on the same day it announced plans to invest up to $50 billion to expand AI and supercomputing capabilities for U.S. government customers.
Overseas there was better news on U.S.-China trade relations. President Donald Trump said on Monday that ties with China were "extremely strong" following a call with Chinese leader Xi Jinping, who told Trump that Taiwan's "return to China" is a key part of Beijing's vision for the world order.
China's stocks rose 1% on Tuesday and the offshore yuan surged to its strongest level against the dollar in more than a year.
Elsewhere, Japan's yen was firmer too, but long-dated government bonds there remained on edge ahead of an auction of 40-year debt on Wednesday that will test demand after the government unveiled its latest fiscal stimulus last week.
Overall, the dollar index was steady to a touch lower.
