The Nasdaq Composite climbed 0.65% on Friday to 23,365.69, stretching its rally to a fifth straight session even as the index closed November down around 2%.
The S&P 500 rose 0.54% to 6,849.09, and the Dow Jones Industrial Average gained 289.30 points, finishing at 47,716.42 during the post-Thanksgiving half-day.
Why traders are pricing in a December Fed rate cut
Wall Street’s latest charge has been powered by rising expectations for an imminent policy shift from the Federal Reserve.
The ignition came on Thursday when New York Fed President John Williams struck a dovish tone, highlighting the potential for “further adjustment” to monetary policy and opening the door for rate reductions as soon as December.
The market seized on these remarks, with investors like Brian Mulberry declaring:
The mood is back to a bit more of a risk-on sentiment…80% to 85% certain we’re going to get a [Fed] rate cut in just a couple of short weeks.
Such conviction has real consequences: when traders sense a fresh round of policy easing, risk assets surge, flows pile back into tech, cyclicals, and other beaten-down sectors, and even short-sellers rush to cover positions.
If the Fed pulls the trigger, it would mark a third straight cut after September and October’s reductions, feeding a narrative of easier money through year-end.
The result on Friday was a pronounced bounce across major indices, overshadowing worries that have dominated much of the month.
Wall Street close: Tech’s monthly stumble vs. a resilient weekly rebound
Despite the Nasdaq’s five-day win streak, the longer-term picture has been less forgiving to tech bulls.
November snapped a seven-month hot streak for the index, leaving it lower by nearly 2% for the month as investors took profits and questioned the near-term payoff of heavy bets on artificial intelligence.
Jitters over stretched AI valuations and slowing hardware demand weighed especially on mega-cap favorites and growth ETFs.
Yet those nerves were countered this week by a powerful comeback: the Nasdaq rose 4% over five sessions, while the S&P 500 and Dow each notched 3%+ weekly gains.
That rebound reflects a classic risk-on rotation as the odds of a rate cut jumped, even if not all tech names participated equally.
Looking forward, investors are watching whether the bounce continues in AI standouts and hyperscalers or rotates toward more cyclical corners of tech.
Volatility may remain high, and for now, the market’s mood is risk-positive—but the path toward a more durable tech rally remains clouded by valuation and profit questions.
What to watch next
All eyes now turn to the December Fed meeting and a slate of economic releases that could sway policymakers and algorithms alike.
Jobs data, inflation measures, and forward guidance from central bank officials will determine whether optimism persists or fades.
For investors, Friday’s rally is a reminder: markets can pivot in an instant when the policy outlook shifts, but the unanswered questions about AI profitability and sector leadership still loom over the long-term recovery.
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