Alphabet Surge Lifts Wall Street Ahead of Holiday/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ The U.S. stock market rose Monday, led by Alphabet’s strong rally tied to AI momentum. Investors anticipate a potential December interest rate cut from the Federal Reserve. Despite ongoing volatility, the S&P 500 remains near record highs.
Alphabet Stock Rally Quick Looks
- S&P 500 climbs 0.9%, Nasdaq jumps 1.7%
- Alphabet shares rise 5.6% on Gemini AI buzz
- Hopes increase for a Fed rate cut in December
- Nvidia dips 0.3%, AI stocks show mixed performance
- Bitcoin continues volatile swings, now near $86,000
- Investors await key U.S. inflation report Tuesday
- Thanksgiving week shortens trading sessions
- Global markets mixed; Alibaba surges 4.7% in Hong Kong
Alphabet Surge Lifts Wall Street Ahead of Holiday
Deep Look
Wall Street opened the week with renewed optimism as tech-driven gains, particularly from Alphabet, lifted major U.S. indexes Monday morning. Riding the momentum of its AI innovation, Alphabet’s 5.6% rally helped push the S&P 500 up by 0.9%, while the Nasdaq surged 1.7%, and the Dow Jones Industrial Average saw a more modest 0.2% increase.
The market’s upswing is largely fueled by growing expectations that the Federal Reserve may cut interest rates at its upcoming December meeting. If the Fed takes this route, it could stimulate borrowing and investment, further boosting corporate performance and stock prices. Currently, traders see nearly a 79% chance of a December rate cut—up significantly from just a week ago, when it was less than a 50/50 bet.
Still, the road to year-end gains is anything but smooth. Markets have experienced sharp swings not only day to day but even within single trading sessions. On Monday alone, the S&P 500 surged 1% shortly after opening, only to give up half of that gain minutes later. The backdrop of fluctuating investor sentiment underscores concerns over inflation, monetary policy, and whether the booming AI sector may be developing into a speculative bubble.
Alphabet has been at the center of the recent AI excitement, receiving widespread acclaim for its latest Gemini AI model. Its stock jump on Monday was one of the biggest individual contributors to the S&P 500’s performance. Meanwhile, chipmaker Nvidia—a frequent AI stock bellwether—slipped 0.3% following a volatile week that included a major earnings report.
Despite the volatility, the S&P 500 remains resilient, sitting just 3.3% below its all-time high set last month. Yet caution lingers. Recent policy uncertainty has created the most significant challenge for investors since April’s market dip, which followed former President Trump’s sudden “Liberation Day” tariffs.
Looking ahead, all eyes are on Tuesday’s U.S. government report on wholesale inflation. Analysts expect a 2.6% year-over-year increase for September, matching August’s figure. Any surprise increase could rattle markets by reducing the likelihood of a Fed rate cut. While some Fed officials support additional easing, others have expressed concern about inflation staying above the 2% target.
In other market developments, shares of Novo Nordisk dropped sharply—down 8.3%—after its Alzheimer’s drug failed to slow disease progression in trials. The setback weighed on the pharmaceutical sector but had limited impact on broader indexes.
Bitcoin continued its erratic behavior, currently trading near $86,000 after a rollercoaster week that saw it swing between $82,000 and $94,000. The cryptocurrency was hovering close to $125,000 just last month, a reminder of its extreme volatility.
Globally, stock markets were mixed. Hong Kong’s Hang Seng Index rose 2%, bolstered by a 4.7% jump in Alibaba shares. The Chinese e-commerce giant is gaining investor interest ahead of its earnings report and following growing buzz around its updated Qwen AI platform.
In the bond market, Treasury yields remained stable. The yield on the 10-year Treasury note eased slightly to 4.04% from 4.06% late Friday, reflecting cautious optimism in the fixed-income sector.
As the Thanksgiving holiday approaches, trading volumes are expected to taper off. U.S. markets will be closed Thursday, with a shortened session on Friday, leading into the high-consumption period of Black Friday and Cyber Monday.
Investors are now balancing near-term optimism with longer-term caution. With AI trends dominating headlines and the Fed’s next move looming large, the market’s next direction may depend as much on economic fundamentals as it does on investor psychology.
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