Equity markets nearly snapped a 3-day winning streak on Thursday, with the S&P 500 rising marginally for the day. The move was sparked by fears of slowing consumer spending and the possibility of deflation and recession. In that scenario, deflating prices and slowing demand could equate to widespread job losses, stagnating GDP growth and aggressive FOMC rate cuts. While rate cuts are what the market wants, they may come at a cost that will trim significant value off the S&P 500.

The S&P 500 is at another critical juncture with little more than a month left in the trading year. Next week is the Thanksgiving Holiday, and after that, December. With inflation in retreat and the FOMC in wait-and-see mode, Santa Claus may bring a rally to Wall Street. No major economic releases are due, but a few earnings reports, including NVIDIA, could amp up the market. The company's solid momentum could easily lead to outperforming the astronomical estimates. Revenue for the AI-chip leader is expected to ramp nearly 175% YOY.