Market Pricing Fed Rate Cuts Amid Tech Rally and Sentiment Split

The U.S. market is pricing a 25bps Fed rate cut in December 2025 with an 85–87% probability [1][2], up from ~30% a week prior [2]. This has fueled a tech-led rally: Alphabet (GOOGL) gained 20.82% over a month (closing at $319.95 on Nov26) [0], while tech sector rose +0.53% [0]. Energy leads (+1.14%) amid supply concerns and rate-cut demand optimism [0]. Reddit discussions show sentiment split: bears warn of irrational rate-cut euphoria and stagflation risks [user input], bulls cite strong earnings and low sentiment indicators [user input].

1. Tech-Fed Policy Sensitivity
   : Tech’s outperformance (GOOGL’s gain) ties directly to rate cut expectations—growth stocks benefit from lower discount rates [0][3].
2. Cross-Sector Dynamics
   : Energy’s lead (+1.14%) combines supply issues and rate-cut-driven demand, a cross-domain opportunity [0].
3. Sentiment Dichotomy
   : Split extends beyond euphoria to AI valuation concerns (bears) and AI as a hedge (bulls), reflecting deep divisions over tech sustainability [user input].

• Risks
  :
  • Fed holds rates: Tech could correct sharply (current valuations price cuts) [1][2].
  • Stagflation: Cuts without growth may worsen inflation/stagnation [user input].
  • AI Overvaluation: Bears warn AI trade is losing steam [user input].
• Opportunities
  :
  • Tech: Continued rally if cuts happen (GOOGL’s AI fundamentals support gains) [0][3].
  • Energy: Leading gains (+1.14%) offer opportunities amid supply/demand factors [0].

• Fed Cut Odds
  : 85-87% for December 25bps cut [1][2].
• Stock Performance
  : GOOGL up 20.82% (month), AMD up +3.93% on Nov26 [0][4].
• Sector Trends
  : Energy (+1.14) > Tech (+0.53) > Healthcare (-0.03) [0].
• Sentiment
  : Split between bears (euphoria/stagflation) and bulls (earnings/low sentiment) [user input].