The week of November 24-28, 2025, marked a dramatic shift in market sentiment as investors navigated a compressed trading schedule amid the Thanksgiving holiday. The market's focus centered on artificial intelligence competition, Federal Reserve policy expectations, and mixed economic signals from a delayed data calendar following the government shutdown. Early-week momentum from a reversal in AI sentiment – particularly Google's resurgence as a credible challenger to Nvidia's AI chip dominance – breathed new life into technology stocks after weeks of weakness. Simultaneously, market participants remained vigilant regarding December Fed policy decisions, with rate cut odds swinging between dovish and hawkish interpretations of labor market conditions. The period exemplified the market's hypersensitivity to narrow themes: AI valuation debates, central bank policy shifts, and the search for clarity amid macroeconomic uncertainty. Cryptocurrency markets exhibited extreme volatility, with Bitcoin's dramatic recovery from seven-month lows underscoring investor capitulation and repositioning dynamics. Across forex and commodities markets, traditional safe-haven flows dominated, lifting gold to resistance levels while putting downward pressure on risk currencies ahead of critical policy announcements.
Market Indices: The SPY S&P 500 advanced through the week, extending gains into positive territory as rate cut expectations buoyed investor confidence. The QQQ Nasdaq Composite produced its best day since May on Monday with a commanding 2.7% surge, driven by artificial intelligence-related enthusiasm. The two-day rally from Friday through Monday represented the index's strongest showing since May 13. However, momentum moderated as the week progressed toward the holiday close. The DIA Dow Jones Industrial Average rallied 0.7% on Wednesday, posting its most favorable four-day stretch since May as market participants rotated toward economically sensitive names and small-capitalization stocks benefited from declining rate-cut expectations.
AI Leadership Shifts Within Technology: The week witnessed a notable rotation within the artificial intelligence trade as investor enthusiasm shifted from mega-cap GPU manufacturers toward companies offering alternative AI infrastructure solutions and cloud-based AI services. Alphabet (GOOGL) commanded market attention with a surge exceeding 6% following reports from The Information indicating that Meta (META) is negotiating to purchase billions of dollars worth of Google's proprietary tensor processing units (TPUs) for its data centers. The news positioned Alphabet as a viable alternative to Nvidia for companies seeking AI computational power. Alphabet's stock reached record highs as investors reassessed the competitive landscape, particularly after the company's successful introduction of Gemini 3 – an advanced AI model demonstrating strong reasoning and coding capabilities. The stock's momentum lifted Alphabet to approach a $4 trillion market valuation, a milestone not yet achieved by any company, and secured its position as the strongest performer in the Magnificent Seven group year-to-date with approximately 68% gains since January.
Nvidia's Competitive Pressure: Nvidia (NVDA) declined 2.4% following reports of Google's expanded TPU strategy and Meta's negotiations. The selloff erased approximately $243 billion in market capitalization as Wall Street questioned whether Nvidia's historical dominance – capturing more than 90% of the AI accelerator market – faced genuine erosion. Nvidia responded with a public statement on the X platform emphasizing that its graphics processing units remain a generation ahead of competitors, offering superior performance, versatility, and interoperability compared to application-specific integrated circuits like Google's TPUs. CEO Jensen Huang had previously noted during earnings discussions that Google remains a customer of Nvidia while suggesting that scaling laws supporting AI model development would drive sustained demand for its Blackwell chip architecture. Nevertheless, the market's emotional reappraisal of competitive dynamics – acknowledging Google's full-stack AI capabilities spanning software, models, cloud infrastructure, and proprietary chips – created near-term volatility for traditional AI infrastructure leaders.
Dell Excels on AI Server Demand: Dell (DELL) emerged as a clear winner, surging 6% after raising fiscal 2026 guidance for AI server shipments to $25 billion from a previous estimate of $20 billion, representing 150% growth from prior-year levels. The company reported record third-quarter AI server orders totaling $12 billion, with nine billion dollars in infrastructure solutions revenue and four billion dollars in storage solutions sales. Dell slightly missed revenue expectations at $27 billion versus estimates of $27.3 billion but delivered non-GAAP earnings per share of $2.59, exceeding the anticipated $2.48. More significantly, the company raised its full-year fiscal 2026 revenue guidance to $111.7 billion from $107 billion, implying approximately 17% earnings growth. The bellwether status of Dell within the AI infrastructure sector reassured investors that robust demand for data center equipment supporting generative AI applications remained intact despite recent volatility in technology valuations.
Sector Performance: Healthcare stocks, previously leading during periods of market stress, maintained elevated levels as measured by the Vanguard Health Care ETF recording fresh all-time highs. Speculative, high-beta technology and quantum computing names – including IonQ (IONQ) and Rigetti (RGTI) – rebounded sharply alongside small capitalization indexes, with the Russell 2000 (IWM) benefiting from renewed interest in interest-rate-sensitive equities. Broader market participation improved notably from the previous week's narrow leadership, with gains spreading across healthcare, technology, financials, and other sector categories as rate-cut expectations increased throughout the trading week.
Forex Markets Face Budget-Driven Volatility: The British pound (GBPUSD) experienced heightened volatility near 1.3200 levels as the UK government released its Autumn Budget on November 26. Market participants braced for significant fiscal developments, with concerns that Chancellor Rachel Reeves' budget would heavily prioritize tax increases targeting higher-income earners and private sector employees rather than directing stimulus toward economic growth. Such an outcome would represent a shift from pre-election promises and could weigh on sterling given the combination of tighter fiscal policy alongside expectations for easier monetary policy from the Bank of England. Early indications suggested pound weakness versus the euro but some stability against a weakening dollar as investors evaluated the budget's economic implications. The pound's directional bias remained contingent upon whether the fiscal plan satisfied gilt market participants and restored confidence in the UK's public finances.
Euro Reaches Critical Threshold: The euro (EURUSD) sank below the psychologically important 200-day moving average, trading near 1.1500 levels, as dollar strength persisted despite declining rate-cut expectations. Market participants continued to rush into U.S. currency positions amid what traders characterized as fading rate-cut hopes and dollar dominance in foreign exchange trading. However, the euro found support from yield differentials that improved as market expectations shifted toward U.S. Federal Reserve easing relative to the European Central Bank's steady policy stance. Later in the week, the euro climbed above 1.1550 following U.S. private payroll data showing job losses totaling 13,500 for each of the past four weeks, prompting recalibration of Fed rate-cut probability assessments and subsequent dollar weakness.
Gold Breaks Key Resistance: Gold (GLD) surged through critical resistance at $4,180, approaching within striking distance of its October 17 all-time high of $4,379 per ounce. The yellow metal benefited from dual catalysts: increasing trader bets that the Federal Reserve would implement rate cuts in December and a weakening U.S. dollar amid shifting interest rate expectations. Bullion's upside trajectory aligned with traditional safe-haven demand flows accompanying equity market volatility and geopolitical tensions. Spot gold prices consolidated around $4,145 per ounce by week's end, with technical indicators suggesting potential continuation toward $4,244 if bullish momentum sustained. The $4,220 resistance level remained crucial for determining whether bulls could establish fresh records or face profit-taking dynamics.
Bitcoin Bounces from Seven-Month Lows: Bitcoin (BTC.X) rebounded approximately 10% from its lowest levels of the week, stabilizing near $88,000 after declining to $80,500 on November 21 – the lowest level since mid-April and representing approximately 36% below October's peak near $125,000. The digital asset's dramatic recovery coincided with signs that intense forced liquidations and margin call-driven selling had subsided, allowing investors to reassess entry points. Market participants attributed Bitcoin's stabilization to capitulation dynamics wherein institutional and retail investors who had accumulated leveraged positions were forced to exit, clearing speculative excesses from the market. Bitcoin ETF outflows totaling $3.5 billion for November – led by BlackRock's (IBIT) redemptions of approximately $2.2 billion – moderated significantly compared to the prior week's pace, though aggregate flows remained negative. The Fear and Greed Index reached extreme fear readings consistent with historical lows, suggesting that sentiment extremes often precede directional reversals.
Ethereum Participates in Crypto Recovery: Ethereum (ETH.X) followed Bitcoin higher, gaining approximately 4% toward week's end as broader digital asset risk appetite rekindled. The second-largest cryptocurrency maintained position above the critical $3,713 support level, with technical indicators suggesting potential for continued recovery if Bitcoin sustained its rebound. Exchange inflows of $643 million in Ethereum represented outflows relative to recent negative pressure, indicating some stabilization in investor positioning. However, conviction regarding crypto's broader recovery remained fragile given the recent $1 trillion destruction in total digital asset market capitalization and ongoing skepticism about altcoin-specific catalysts.
Federal Reserve Policy Uncertainty: The probability of a Federal Reserve interest rate cut in December fluctuated significantly throughout the week as market participants digested delayed economic data released following the government shutdown. Early-week reports from Federal Reserve officials – including Fed governor Christopher Waller and other senior policymakers – calling for additional rate cuts bolstered market expectations, lifting probability assessments toward 80%. However, subsequent economic data releases and mixed messaging regarding labor market conditions created ambiguity. Private payroll data showed job losses totaling 13,500 during each of the prior four weeks, suggesting underlying labor market softness and supporting the case for monetary easing. Conversely, September nonfarm payrolls data released mid-week showed employment gains of 119,000 – more than double economist expectations – reinforcing Fed Chair Jerome Powell's previous commentary that a December rate cut was not a "foregone conclusion." By week's end, market pricing oscillated between 40-60% probability for a December cut, down from 97% probability in mid-October but elevated from the 22% probability calculated by some economists in late November.
JPMorgan and HSBC S&P 500 Targets: Major financial institutions maintained constructive guidance despite November's volatility. JPMorgan (JPM) forecasted the SPY S&P 500 reaching 7,500 in 2026, with potential upside toward 8,000 if the Federal Reserve implemented two additional rate cuts beyond December. The forecast supported anticipated earnings growth of 13-15% next year alongside broader productivity gains from artificial intelligence investments and deregulation. HSBC similarly projected 7,500 for the SPY S&P 500, underscoring consensus expectations despite near-term uncertainty. Both institutions highlighted the K-shaped economic recovery reshaping consumer behavior, with diverging outcomes benefiting large corporations positioned to capture AI-driven productivity gains while pressuring lower-income and middle-class consumer segments.
The SPY S&P 500, QQQ Nasdaq Composite, and DIA Dow Jones Industrial Average all faced challenges during November, tracking toward month-end declines that would represent departures from historical seasonal patterns. Historically, November has produced average gains of 1.8% since 1950 and 1.6% during post-presidential election years, yet 2025's November has been marked by valuation recalibrations, AI enthusiasm swings, and central bank policy uncertainty. The compressed Thanksgiving week with Thursday closures and Friday early closes contributed to elevated volatility around earnings releases and data surprises, as reduced liquidity magnified directional moves.
Beyond Alphabet and Dell, major technology firms exhibited mixed performance. Microsoft (MSFT) posted modest gains despite technological leadership questions. Tesla (TSLA) benefited from broader tech recovery, while traditional software and infrastructure firms faced headwinds from repricing discussions around AI infrastructure spending. Banking sector stocks, including JPMorgan (JPM), rallied on recession fears diminishing and rate-cut probability moderation suggesting longer duration for profitable net interest margins.
Investors should monitor the Federal Reserve's December 9-10 policy decision as the critical near-term catalyst for market direction. The December labor report – delayed from its usual schedule due to the government shutdown – will not be available until after the FOMC decision, leaving policymakers to navigate decisions with limited recent data. Additionally, negotiations around Trump administration policy, particularly regarding tariffs, potential deregulation benefiting financial services and energy sectors, and artificial intelligence regulation, remain sources of directional uncertainty. Earnings season, transitioning into year-end, will provide crucial guidance on 2026 profitability and capital allocation priorities. International factors – including UK budget implications for sterling, European growth concerns, and geopolitical developments – warrant continued monitoring as portfolio hedges and policy responses evolve.