Consumer readout tests Fed hopes

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By Mike Dolan What matters in U.S. and global markets todayBy , Editor-At-Large, Finance and Markets As a year-end Federal Reserve interest rate cut comes back into play, the trickle of backlogged U.S. economic data turns into a torrent on Tuesday as 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 supercompu...

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