US stocks saw a notable rise on Friday after a volatile session fueled by renewed optimism for a potential interest rate cut in December. The tech-heavy Nasdaq Composite gained over 1%, while the S&P 500 increased by 1.2%, managing to recover from losses experienced earlier in the day. The Dow Jones Industrial Average experienced a robust uptick of 1.5%, which translates to an increase of nearly 700 points. This positive movement came on the heels of a significant drop in equities on Thursday, highlighting the market’s volatility.
The uptick in stock prices at the start of trading on Friday was largely attributed to statements made by New York Federal Reserve President John Williams, who expressed that there is “room for a cut in the near term.” His comments led to a spike in bets for a rate cut at the Fed’s upcoming meeting, with traders now pricing in a 75% chance of a cut in December, a noticeable increase from around 40% just the day before. This reflects a growing rift within the Federal Reserve as it approaches its final meeting of 2025, suggesting varied perspectives on the current economic landscape.
While stock markets showed resilience, the cryptocurrency sector struggled, with Bitcoin dropping to around $82,000. This decline marks a significant downturn for Bitcoin, which is now facing its worst month since the cryptocurrency collapse in 2022. Investor sentiment in the crypto space remains subdued, further reflected in this downward trend.
Concurrent with the stock market’s volatility, the S&P 500 is tracking towards its worst November performance since 2008, amid increasing apprehension regarding a possible “bubble” driven by artificial intelligence advancements. Even amid a stellar earnings report from Nvidia, which typically would boost market confidence, concerns about the tech sector’s sustainability persisted.
Consumer sentiment continues to be a concern, with a report from the University of Michigan indicating that consumer confidence has declined further, now standing at a reading of 51 for November, down from 53.6 in October. This drop mirrors ongoing worries about inflation and potential job losses, issues that remain top of mind for many Americans.
The fluctuations in stock prices were evident as trading progressed, with the Nasdaq Composite and S&P 500 initially turning red before reversing to session highs, ultimately gaining nearly 0.9% and 1%, respectively. The Dow also saw an increase of around 1.3%. If these gains hold, the drop in major indexes for the week could be reduced to less than 2%, with the Nasdaq on track to see a loss of about 2.8%.
In corporate news, SoftBank Group shares fell over 5% following a bond issuance to facilitate its aggressive investment in artificial intelligence, raising investor fears over financial strain amidst growing debts across the tech sector. This decline in SoftBank’s stock encapsulates wider anxieties about the impact of high leverage in what many perceive to be an inflated AI market.
Amid these developments, Eli Lilly achieved a significant milestone by surpassing a $1 trillion market cap, becoming the first healthcare company to join this elite club. Its stock surged to a record high, credited largely to successful products in the GLP-1 category, demonstrating robust growth.
Additionally, companies like Netflix and Comcast have submitted formal bids to acquire Warner Bros. Discovery, reflecting ongoing consolidation within the entertainment industry. Meanwhile, Gap’s stock saw a rise following strong earnings that beat expectations, signaling some pockets of resilience within retail.
As the market continues to navigate turbulent waters with fluctuating investor sentiments, Wall Street faces uncertainty. The interplay between economic indicators, corporate performances, and investor psychology will be critical in shaping the outlook in the coming weeks.
