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The three main U.S. equity indexes gapped up at the opening bell Wednesday, rallied all day, and will carry four straight days of gains into the Thanksgiving holiday. Markets reflect resurgent bullishness about AI and tech as well as refreshed hope for a December rate cut.
Incoming economic data continue to support the idea of another rate cut at the next Fed meeting. The Department of Labor said weekly jobless claims declined by 6,000 to 216,000 for the week ending November 22, below a consensus forecast of 225,000. The four-week moving average declined by 1,000 to 224,000.
Continuing claims for the week ended November 15 were 1,960,000 vs 1,953,000 for the prior week and a Wall Street estimate of 1,963,000. And the Census Bureau said durable goods orders increased by 0.5% month over month in September, in line with expectations.
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“With no other major data release scheduled before December 9-10,” Goldman Sachs economist Joseph Briggs writes, “the September jobs report may have sealed a 25-basis-point cut at the December 9-10 FOMC meeting.”
Briggs assumes the Fed will cut in March and June as well, leaving the target range for the federal funds rate at 3.00% to 3.25%. “Tariff pass-through has kept inflation near 3%,” the analyst observes, “but should abate in 2026.”
Fed funds futures pricing has been volatile amid an absence of economic data collected and released by the federal agencies during a record-long government shutdown. CME FedWatch shows an 84.9% probability the Fed cuts interest rates next month, up from 30.1% a week ago and vs 91.7% a month ago.
At the closing bell, the tech-heavy Nasdaq Composite was up 0.8% at 23,214 to put the finishing touches on its best Thanksgiving Week since 2008, according to Dow Jones Market Data.
The blue-chip Dow Jones Industrial Average was up 0.7% at 47,427. Papa Dow goes into the holiday on a four-day, 1,675-point rally. The broader S&P 500 had added 0.7% to 6,812 and, like the Dow, has posted its best Thanksgiving Week rally since 2012.
Will Alphabet or Apple catch Nvidia?
Alphabet (GOOGL, -1.1%) cooled off a day after a report that Meta Platforms (META, -0.4%) is considering Google-produced chips to run its data centers was interpreted as a threat to Nvidia (NVDA, +1.4%) as the leader of the AI revolution.
GOOGL stock is up 24.4% this month with only Friday’s short trading session left on the calendar. (Note the stock market closes at 1 pm Eastern Standard Time, and the bond market closes at 2 pm on Black Friday.)
NVDA, despite another stellar earnings report and more staggering commentary from CEO Jensen Huang, is down 4.5% in November. META, meanwhile, is off 13.8% this month.
Apple (AAPL, +0.2%), on the other hand, is going higher again and is approaching new all-time-high territory after posting a 5.5% gain so far in November. At $4.102 trillion, it’s edging closer to Nvidia ($4.380 trillion) for leadership atop the global market cap rankings.
Apple is seeing strong demand for its new iPhone lineup, and it is not subject to the same sort of speculation about return on invested capital related to massive AI infrastructure ventures as the so-called hyperscalers.
Alphabet is now No. 3 in the rankings, followed by Microsoft (MSFT, +1.8%), Amazon.com (AMZN, -0.2%) and Broadcom (AVGO, +3.3%). Meta is No. 7, while the seventh member of the Magnificent 7, Tesla (TSLA, +1.7%), is No. 10 – and potentially climbing on its own AI chip ambitions.
Deere in the headlights
Deere (DE, -5.8%) took its turn on a relatively quiet earnings calendar and closed at its lows of the day after the world’s leader in farm equipment sales warned tariffs will continue to impact its business.
Deere reported fiscal 2025 fourth-quarter earnings of $3.93 per share, better than the $3.84 analysts expected but down from $4.55 a year ago. Revenue was up 14% to $10.58 billion and beat a Wall Street estimate of $9.83 billion.
“This past year brought its share of challenges and uncertainty,” CEO John May said in a statement, “but thanks to the structural improvements we’ve made and the diverse customer segments and geographies we serve, we were able to achieve our best results yet for this point in the cycle.”
May said management believes 2026 “will mark the bottom of the large ag cycle,” though Deere will face ongoing margin pressures from tariffs and other persistent challenges for the sector. Deere forecasts net income for fiscal year 2026 of $4.00 billion to $4.75 billion.