What’s Driving the Markets Today?

U.S. stock futures are rising slightly on Monday ahead of this week’s Federal Reserve meeting, as investors weigh the complications around Netflix’s proposed acquisition of Warner Bros Discovery’s TV and film assets. The Japanese economy contracts sharply in Q3, while Chinese exports increase despite a significant drop in shipments to the U.S.

1. U.S. Futures Maintain Positive Tone

U.S. stock index futures rise slightly on Monday, building on last week’s gains as investors await the Fed’s final meeting of the year.

As of 02:40 ET (07:40 GMT), S&P 500 futures trade up 13 points or 0.2%, Nasdaq 100 futures gain 87 points or 0.3%, and Dow Jones futures increase 24 points or 0.1%.

All three major U.S. indices finished last week in positive territory for the second consecutive week. The S&P 500 and NASDAQ Composite record four consecutive days of gains, while the Dow Jones rises in three of the past four sessions.

The upbeat tone reflects expectations that the Fed may ease monetary policy on Wednesday, especially after the delayed report on the core Personal Consumption Expenditures index for September comes in lower than expected.

Federal funds futures indicate roughly an 88% probability of a rate cut, according to CME’s FedWatch.

The economic calendar remains relatively light on Monday, with key quarterly earnings reports scheduled later this week from Broadcom, Adobe, Oracle, Costco, and Lululemon.

2. Netflix Faces Real Battle for Warner Bros Discovery

Netflix (NASDAQ:NFLX) announces plans to acquire Warner Bros Discovery’s (NASDAQ:WBD) TV, film studios, and streaming division for $72 billion, but the real challenges are just beginning, as the deal is likely to face significant antitrust scrutiny in both Europe and the U.S.

“The biggest factor in a deal of this size and complexity is the potential regulatory hurdles both companies will need to navigate,” says Anthony Saglimbene, chief strategist at Ameriprise Financial.

“Both companies likely expect they may have to divest assets to finalize the deal. I think there’s ample room for that.”

Hollywood unions and theater owners have already expressed concern that the acquisition may lead to job losses, concentration of power, and fewer theatrical releases.

U.S. President Donald Trump also comments on Sunday, stating he will have a say in whether the deal is approved.

“I will be part of that decision,” Trump says, highlighting the potential concentration of market power.

“Economists will have to weigh in… But it’s a big market share. It could certainly be an issue,” he adds.

3. Japanese Economy Contracts Sharply in Q3

Japan’s economy shrinks faster than initially estimated in Q3, complicating the Bank of Japan’s upcoming policy decision next week.

GDP falls at an annualized rate of 2.3% instead of the initially reported 1.8% for the three months through September — the fastest decline since Q3 2023.

On a quarterly basis, GDP contracts 0.6%, surpassing expectations of 0.5% and the initial estimate of 0.4%.

Economic weakness explains Prime Minister Sanae Takaichi’s stimulus package announced last month — the largest new spending initiative since the pandemic.

The government calculates that the package will boost Japan’s GDP by roughly 1.4 percentage points per year over the next three years.

Nonetheless, the BOJ is still likely to raise its key rate at its December 18–19 meeting, as the core inflation measure remains at or above the 2% target for more than three and a half years — the longest period since the early 1990s.

4. China Trade: Strong Exports and Broader Surplus

China’s exports rebound sharply in November, exceeding forecasts, while imports grow moderately, resulting in a wider-than-expected trade surplus.

Exports rise 5.9% year-on-year, reversing the 1.1% decline in the previous month. Imports increase 1.9% compared to 1.0% in October.

As a result, the trade surplus reaches $111.68 billion in November, above forecasts of $100.20 billion and $90.07 billion a month earlier.

The strong export growth is driven by increased shipments to markets outside the U.S., as manufacturers strengthen trade ties with other countries in response to high tariffs imposed by President Donald Trump.

Exports to the U.S. fall 29% year-on-year in November, while exports to the EU rise 14.8%, to Australia 35.8%, and to fast-growing Southeast Asian countries 8.2%.

5. Oil Near Two-Week High

Oil prices rise slightly on Monday, trading near two-week highs as investors anticipate a potential Fed rate cut, which could stimulate economic growth and energy demand.

Brent gains 0.2% to $63.85 per barrel, and U.S. WTI climbs 0.2% to $60.20 per barrel.

Both contracts closed Friday at their highest levels since November 18.

Meanwhile, progress toward peace in Ukraine remains slow, and Reuters reports that the G7 and EU are discussing replacing the Russian oil price cap with a full ban on maritime services — a move that could further restrict supplies from the world’s second-largest producer.