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Investors entered Monday with optimism as U.S. stock index futures showed gains. The upcoming Federal Reserve interest rate cut later in the week and key data prints play a crucial role in shaping policy for the next year. The Fed's final rate decision for the year is set for Wednesday, with traders expecting a 25 basis point rate reduction with over 97% certainty, according to CME's FedWatch. However, the main focus will be on policymakers' outlook for next year, especially with the release of an updated "dot plot" of forecasts. Amid strong economic growth and persistent inflation, bets on the pace of rate cuts have moderated.

Analysts' Perspectives

Analysts at SEB believe that the main focus will be on the Fed, which is generally expected to cut by 25 basis points. But they also expect the Fed to lower expectations of rate cuts further ahead. This indicates the complexity and uncertainty in the current market situation.The heavy data docket awaiting investors over the week includes S&P Global's December flash manufacturing and services PMIs due at 9:45 a.m. ET. Industrial production figures, retail sales, and personal consumption expenditure data are also scheduled throughout the week. These data releases will provide valuable insights into the economic health and potential trends.At 7:05 a.m. ET, Dow E-minis were up 52 points, or 0.12%, S&P 500 E-minis were up 11 points, or 0.18%, and Nasdaq 100 E-minis were up 65.75 points, or 0.30%. The benchmark S&P 500 and the blue-chip Dow ended the previous week lower, while the tech-heavy Nasdaq had its fourth straight week of gains after reaching the 20,000 mark for the first time.This year has been a bumper run for stocks. Gains in shares related to artificial intelligence, the start of the Federal Reserve's rate cutting cycle, and expected pro-business policies from Donald Trump's incoming presidential administration have lifted equities.Shares of MicroStrategy rose 3.5% in premarket trading as the software company and bitcoin buyer was set to join the tech-heavy Nasdaq 100 index. Palantir (NASDAQ:PLTR) and Axon Enterprise (NASDAQ:AXON) gained 0.4% and 2.3%, respectively, and will also be added to the reconstituted index. The changes will take effect on Dec. 23. Super Micro Computer (NASDAQ:SMCI), set to be removed from the index, dropped 13.5%.Crypotocurrency stocks rose as bitcoin briefly jumped above $106,000 after Trump suggested he plans to create a U.S. bitcoin strategic reserve similar to its strategic oil reserve. Coinbase Global (NASDAQ:COIN) rose 1.8% and bitcoin miner MARA Holdings gained 2.3%.Honeywell International (NASDAQ:HON) gained 3% after the industrial conglomerate said it was exploring a separation of its aerospace business. This move shows the dynamic nature of the market and the various factors influencing different sectors.