Fed Daly's December Rate Cut Support: Market Impact & AI Sector Implications

On Nov 24, 2025, San Francisco Fed President Mary Daly joined other officials (Williams, Waller) in supporting a December rate cut, citing labor market weakness [1]. This led to a 40+ percentage point surge in CME FedWatch probability (to ~85%) [1][2]. Markets rallied post-announcement: S&P500 (+1.03%), NASDAQ (+0.98%), Russell 2000 (+2.00%) [3]. Tech sectors gained 0.51% [4], aligning with Reddit’s AI investment narrative, though NVDA data is unavailable due to API errors [5].

• Sector Rotation
  : Lower rate expectations shifted capital to growth sectors (tech) while financials underperformed (-0.047%) due to margin concerns [4].
• Narrative Alignment
  : Tech’s outperformance supports the link between rate cuts and AI investments, despite missing direct stock data [4][5].

• Risks
  : Speculative AI bubble claims lack valuation metrics; labor market weakness may impact long-term growth [1].
• Opportunities
  : Tech sector upside from reduced borrowing costs; small-cap rally signals broad market optimism [3][4].

• Fed meeting: Dec 9-10 [1].
• Probability surge: ~40% → ~85% [1][2].
• Market reactions: Indices up, tech outperforming [3][4].
• Gaps: No NVDA data, no AI bubble metrics [5].