Dow +493.15 at 46245.20, Nasdaq +195.03 at 22273.10, S&P +64.23 at 6602.98
Nasdaq Composite: +15.3% YTD
S&P 500: +12.3% YTD
DJIA: +8.7% YTD
Russell 2000: +6.3% YTD
Tech and AI Sector Under Pressure
Despite Nvidia’s blockbuster earnings and record revenue, tech and AI stocks have faced sharp profit-taking. Investors are increasingly questioning lofty AI-driven valuations and the sustainability of recent sector gains, sparking a broader pullback.
Volatility Surges Ahead of Fed Decision
The CBOE Volatility Index fell by over 11% but remains elevated after a turbulent week, reflecting persistent investor anxiety. Uncertainty over whether the Fed will cut interest rates at December’s meeting is amplifying market swings.
S&P 500 and NASDAQ Rebound but Remain Below Highs
The S&P 500 and NASDAQ 100 recovered nearly 1% on Friday but are still down 4-7% from recent peaks. Market caution follows months of AI and rate cut optimism, now giving way to end-of-year skepticism.
Crypto Markets Bounce Back
Bitcoin rebounded 2.1% to over $86,000 after weeks of heavy selling, tracking tech equity sentiment and benefiting from increased institutional interest. The correlation with tech stocks demonstrates cross-market risk-off dynamics.
Crude Oil Under Pressure on OPEC+ Moves
Crude prices slipped 1.59% to $58.06 as oversupply concerns and OPEC+’s unexpected production increases weighed on energy markets. The persistent price weakness threatens future drilling investments and energy sector employment.
US stock indexes recovered from early choppy trading on Friday and settled higher. Semiconductor stocks rallied on Friday, leading the broader market higher, in hopes of a Fed rate cut next month. Dovish comments from New York Fed President John Williams on Friday knocked T-note yields lower and ignited a rally in stocks when he said he sees room for a Fed rate cut in the “near term.” His remarks knocked the 10-year T-note yield down to a 3-week low of 4.03% and pushed up the chance of a Fed rate cut at next month’s FOMC meeting to 63% from 35% on Thursday. Stocks also found some support today after the University of Michigan’s US Nov consumer sentiment index was revised upward.
Williams is just one guy, so we will see how this pans out. Frankly, I’m surprised the rate cut hopes jumped from 35% to 63%. It seems optimistic to me.
However, 444 S&P 500 stocks were higher on Friday, the most since late May. The start of something or just a friendly dead cat bounce? Bottoms can take some time to carve out, unless, of course, we get another one of those patented V-shaped recoveries. I think we all want a V recovery after all this pain.
Key Events This Week: 1. September PPI Inflation data – Tuesday 2. September Retail Sales data – Tuesday 3. November CB Consumer Confidence data – Tuesday, 4. October Pending Home Sales data – Tuesday, 5. US Q3 2025 GDP data – Wednesday 6. September Durable Goods Orders data – Wednesday 7. September PCE Inflation data – Wednesday 8. September New Home Sales data – Wednesday 9. US Markets Closed, Happy Thanksgiving! – Thursday 10. US Markets Close at 1 PM ET – Friday
Busy week; additionally, expect incessant speculation about what the Fed will do in December.
Soooooo, I’m looking for something guys………
This is interesting: Historically, when the volatility index, $VIX, jumps above 28.7 points, the S&P 500 has delivered strong returns over the following 12 months. At VIX levels of 28.7 to 33.5, the index returned an average of +16 % over the next year between 1991 and 2022. When the VIX exceeded 33.5, the average 12-month return was as much as +27%. By comparison, when VIX traded between 11.3 and 12.0, the S&P 500 returned +15% over the following year. Elevated VIX levels have historically created buying opportunities.
Enjoy the rest of your Sunday, and I’ll see you in the morning.