This article examines the recent performance of the S&P 500, highlighting its significant volatility and the growing anticipation of a Federal Reserve rate cut. It delves into the market's reactions to these developments and their potential implications for investors.
Navigating Market Swings: Unpacking the S&P 500's Volatile Week and the Looming Rate Cut Decision
Market Performance Overview: A Week of Fluctuations for the S&P 500
The S&P 500 index recently experienced a period marked by substantial intraday price swings, particularly during the trading week that concluded on Friday, November 21, 2025. By the end of this tumultuous week, the index registered a notable decrease, falling 1.95% from its closing value of the preceding week, indicating a challenging environment for market participants.
Federal Reserve Expectations: Shifting Tides Towards a Rate Cut
Accompanying the market's volatility, there was a significant shift in expectations regarding the Federal Reserve's monetary policy. The CME Group's FedWatch Tool, a key indicator of market sentiment, showed a dramatic increase in the probability of a quarter-point interest rate reduction. The likelihood of such a cut on December 10, 2025 (2025-Q4), surged to 71%, a substantial rise from just 44% a mere week earlier. This rapid adjustment in expectations largely materialized on Friday, November 21, 2025, suggesting that a single day's events had a profound impact on market forecasts.
