US stocks experienced a notable rally on Friday, concluding a choppy session on a positive note, as optimism grew over the prospect of an interest rate cut in December. The tech-laden Nasdaq Composite saw an increase of about 0.9%, while the S&P 500 climbed approximately 1%. The Dow Jones Industrial Average surged nearly 1.1%, adding close to 500 points.
Early gains were bolstered by comments from John Williams, President of the New York Federal Reserve, who indicated that there is potential for a rate cut “in the near term.” Following his remarks, traders dramatically adjusted their expectations, now pricing in a 75% chance of a cut at the Fed’s upcoming December meeting, a significant rise from just 40% the day before. Williams’ statement comes against a backdrop of a Federal Reserve showing signs of internal division as it approaches its last meeting of the year.
Despite Friday’s gains, the broader market remained on track for weekly losses, with both the S&P 500 and Nasdaq suffering declines of nearly 2% and 3%, respectively. Concerns over a speculative AI-driven “bubble” have continued to unsettle investors, even after Nvidia, a key player in the AI sector, reported strong earnings. The company’s stock ended the trading session slightly down, marking a 1% decline.
Cryptocurrencies, on the other hand, have struggled considerably. Bitcoin, the leading cryptocurrency, fell below $82,000, marking its worst month since the crypto market crash of 2022, raising concerns among investors about the sustainability of digital currencies.
Additionally, consumer sentiment appears to be waning, as indicated by a measure from the University of Michigan showing a decline in confidence among consumers. The sentiment index dropped to 51 in November, attributed to persistent worries about rising prices and potential job losses.
In other news, Eli Lilly joined the elite trillion-dollar market cap club, becoming the first healthcare company to reach this milestone, propelled by the success of its weight-loss drugs. Meanwhile, chipmaking giant Nvidia engaged in discussions with the Trump administration regarding the potential sale of H200 chips to China, a topic that could significantly impact the company’s market prospects.
As the trading day unfolded, crude oil prices also fell after the U.S. signaled support for a potential peace deal in the Ukraine-Russia conflict, which could lead to a de-escalation of tensions and a reopening of Russian oil markets. Brent crude futures dropped roughly 1.7%, while West Texas Intermediate fell by about 2%.
Overall, while it was a day marked by gains in stocks tied to the optimism for interest rate cuts, the ongoing volatility in cryptocurrencies and broader economic concerns continued to influence the market landscape.
