The final month of the year gets underway on Monday, and investors will be looking for a smoother month to round out the year after choppy November trading saw the Nasdaq Composite (^IXIC) snap a seven-month winning streak while the S&P 500 (^GSPC) moved back to within 1% of a record high.
On Friday, markets ended the week by notching a fifth straight session of gains to close out the up-and-down month in a holiday-shortened trading session. And despite snapping its monthly winning streak, the Nasdaq is also within 3% of a record. The Dow is less than 2% off its record close.
And while the final five days were good to the market, the past month was anything but steady, as worries about a potential AI bubble weighed on some of the market’s heavyweights. Over the last month, Meta (META) stock has lost 13%, while Nvidia (NVDA) shares are down about 8%. Oracle (ORCL) has lost nearly 30% over this period.
The exception has been Google (GOOG), whose stock is up about 20% after a strong earnings report, positive reaction to its Gemini 3 model, and, this past week, reports of a multibillion-dollar AI chip deal with Meta.
In the week ahead, investor focus will remain on the odds of a rate cut at the Federal Reserve’s December meeting, with traders currently predicting an 86.9% chance of a quarter-point cut. The Fed entered its mandatory blackout period on Saturday, marking the start of a quiet week and a half before the Federal Open Market Committee meets on Dec. 9-10.
Reports this past week also suggested that the Trump administration is getting closer to landing on a candidate to succeed Jerome Powell as chair of the Fed, with Kevin Hassett, director of the National Economic Council, appearing to have emerged as the frontrunner for the nomination.
The economic calendar will continue a slow normalization after the 43-day US government shutdown threw data collection into chaos, with private reports on US manufacturing activity, service sector activity, and ADP’s monthly private payrolls report featured.
On the corporate earnings side, bargain retailers Dollar Tree (DLTR), Dollar General (DG), and Five Below (FIVE) are all reporting, while Salesforce (CRM) and CrowdStrike (CRWD) will feature from the tech industry.
Investors have been getting plenty of bearish signals over the past month.
Famed short sellers Michael Burry and Jim Chanos made calls against the AI trade. Nvidia leadership published an ill-received letter attempting to assert that the chipmaking giant does not, in fact, have the same structural problems as Enron. Elsewhere, the largest US retailers saw mixed results in third quarter earnings as consumers have been squeezed by inflated prices.
