Stocks Starting to Rebound after Uneven Week
Stocks are looking slightly bullish this week but could run into some of the same debilitating factors as they did last week.
Quick overview
- The stock market started positively on Monday, with the S&P 500 up 0.2% and the Nasdaq climbing 0.5%.
- Tech stocks have been volatile, driven by strong earnings and concerns over a potential AI market bubble.
- Despite fears of a market crash, inflation remains steady, and a potential rate cut in December could boost stock performance.
- November has seen significant declines in stock indices, influenced by the longest government shutdown in U.S. history and ongoing trade tensions.
Last week, stocks fluctuated wildly between highs and lows, but for the Monday of the last week of November, the stock market is off to a good start.
In early morning trading for Monday, the S&P 500 added 0.2%, and tech stocks helped the Nasdaq climb 0.5%. The Dow remained flat as the week began, but we do not expect that to last long. This is likely to be another wildly uneven week, especially with Black Friday sales closing the month off.
Tech stocks fluctuated the most over the last week, with movement fueled by strong earnings statements and fears of an AI market bubble bursting. We expect those fears to persist through this week as well and the rest of the year, though fears may be allayed as tech companies continue to beat earnings expectations set by Wall Street.
Upcoming Rate Cut?
Despite concerns that aspects of the stock market may crash, inflation remains relatively steady, and there is hope that a new rate cut will be issued in December. That would make three cuts for the year, and John Williams, the president of the Federal Reserve Bank of New York, indicated that a cut could be incoming.
A cut could help bring the stock market back up to its October highs. Throughout November, stock indices have fallen sharply, well off from their averages in the unusually strong months for September and October this year. The Dow Jones dropped 3% for the month, and the S&P 500 fell about 3.5% for November so far. The Nasdaq Composite also declined, losing a considerable 6% this month as technology stocks underperformed.
November stock performances have been hurt by more than just AI market fears. The longest government shutdown in U.S. history did not help matters and dipped into earnings and investments in a significant way. The market may spend the rest of the year trying to catch up after those weeks of inactivity, and it does not help that the threat of high tariffs and poor trade relations between the United States and some of its partners still looms large.
Monday may see the market tick upward, but these negative factors continue to dominate the conversation and keep investors wary. However, strong sales may help the market close out the week strong and start off December near record highs.
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