Fed Decision Week: A Comprehensive Guide for Indices, the US Dollar & Gold
Monday 08 December 2025
S&P 500 Breaks Above 6800, Gold Slumps Further
America’s benchmark stock index, the S&P 500, struck a new record high on Monday, 27 October - breaking over 6,800 for the first time. Investors were in an optimistic mood ahead of a busy week that includes a meeting between President Donald Trump and China’s Xi Jinping on Thursday, as well as a Fed rate decision on Wednesday and big tech earnings.
At the same time, gold came under renewed selling pressure as some of the speculative excess built up over the past several months continues to be withdrawn from precious metals markets. As of Tuesday morning, gold futures were trading at $3,900 - well below the widely watched $4,000 level.
TL;DR
US stocks surged to record highs as trade optimism and strong tech earnings lifted sentiment.
Gold extended its pullback, falling below $4,000 amid risk-on positioning and Fed expectations.
Investors await the Trump–Xi meeting and Wednesday’s Fed rate decision for the next market cue.
S&P 500 Joins Dow at Record High
All three major averages closed in record high territory on Monday as optimism towards US stock markets got a boost from increasing signs of a trade truce between the US and China. US President Donald Trump's meeting with Chinese President Xi Jinping on the sidelines of the APEC summit on Thursday increases the two countries' ability to de-escalate tensions and pave the path to a lasting trade deal.
While leading industrial stocks had already led the Dow Jones to a record high on Friday, a pickup in momentum among leading tech stocks, ahead of earnings this week, helped the S&P 500 catch up on Monday.
Tech Stock Earnings
Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta (META) and Microsoft (MSFT) will all release third quarter earnings this week.
Qualcomm (QCOM) led the pack, jumping 11% on Monday on the announcement of a new AI chip that will compete with Nvidia (NVDA), which along with Broadcom rose more than 2% on the day.
Gold’s Big Pullback Continues
US China trade optimism weighed on haven assets, including gold, which underwent its third day of selling as of Tuesday morning, down to a three-week low. Speculators are possibly also lightening up on gold positions going into tomorrow's (Wednesday) Federal Reserve meeting, where markets are pricing in another 25 basis point rate cut.
A minor pullback in the US dollar has done little to support gold, which is undergoing a large speculative unwind. The yellow metal dived below $4000 per oz on Monday, and the selling has continued through into Tuesday. It remains up 50% year-to-date. (Source: Reuters and Yahoo Finance)
Conclusion
Optimism over a potential US-China trade breakthrough and strong tech momentum have propelled US equities to record highs. At the same time, gold continues to retreat as investors rotate out of safe havens ahead of the Fed’s rate decision.
*Past performance does not indicate future results. The above are only projections and should not be taken as investment advice.
FAQs
Why did the S&P 500 hit a record high?
Hopes of a US-China trade truce and strong earnings from major US firms boosted investor confidence.
What’s causing gold prices to fall?
Traders are shifting from safe havens to equities ahead of the Fed’s expected rate cut.
Which tech stocks are moving markets?
Qualcomm, Nvidia, Apple, and Microsoft are leading gains ahead of key earnings reports.
When is the next Fed rate decision?
The Federal Reserve meets on Wednesday, with markets pricing in a 25-basis-point cut.
