U.S. stocks experienced a downturn on Monday as investors positioned themselves ahead of the upcoming November jobs report and other critical economic data that could influence expectations for interest rate cuts in 2026. The S&P 500 and the Dow Jones Industrial Average both fell approximately 0.1%, while the tech-heavy Nasdaq Composite declined by 0.6%. This decline followed significant losses from the previous Friday.
Concerns surrounding inflated expectations for artificial intelligence (AI) have led to a shift in investor sentiment, with many moving away from tech stocks toward value stocks. This shift has particularly impacted the Nasdaq and the S&P, though the Dow, which has a smaller concentration of tech stocks, has been less affected. Despite the pullback in tech, some strategists view this rotation as a positive development, indicative of a wider support for stocks beyond just tech leadership. They anticipate that any weakness in AI stocks might benefit other sectors.
As the final full trading week of 2025 unfolds, market optimism toward stocks remains high. Analysts are hopeful about President Trump’s potential to reshape the Federal Reserve and the anticipated fiscal stimulus from his proposed “One, Big, Beautiful Bill,” which is expected to bolster stocks and corporate earnings. This week’s key economic releases, delayed due to a recent U.S. government shutdown, will include the monthly jobs report on Tuesday and an inflation update on Thursday, both for November. These reports are critical for assessing whether the Fed will ease rate cuts moving forward.
A focal point is the impending selection of a new Federal Reserve Chair, as Jerome Powell’s term concludes in May. Trump has indicated that Kevin Hassett is a leading candidate, with Kevin Warsh also in contention. Hassett has stated that while he would consider Trump’s views if appointed, he would maintain independence in rate-setting decisions.
In corporate news, iRobot, known for its Roomba vacuum cleaners, saw its stock plunge nearly 70% as it filed for bankruptcy. The company has faced mounting challenges from lower-priced competitors in China and the impact of tariffs instigated during Trump’s administration.
Investor anxiety surrounding AI valuations continued to weigh heavily on tech stocks. Notably, Broadcom’s shares fell further following a disappointing earnings report, while Oracle also faced declines. UBS analysts alleviated some of the fears, asserting that there is no evidence of an AI investment bubble, predicting that spending on AI infrastructure would continue to grow.
In cryptocurrency markets, Bitcoin dropped over 3% to around $86,000, continuing its drift following a recent high of $94,000. Analysts noted that interest in cryptocurrency exchange-traded funds has decreased, which may limit future growth for Bitcoin, pushing it into a consolidation phase.
Gold prices remained steady, buoyed by ongoing expectations of a favorable economic environment and the prospect of further Fed interest rate reductions, while Tesla’s stock saw a brief increase, touching an all-time high before retracting slightly.
Overall, the week’s economic data releases and the evolving commentary surrounding U.S. monetary policy will likely play crucial roles in shaping market sentiment as the year comes to a close.
