The S&P 500 kicked off Thanksgiving week with a strong risk-on rally on Monday, November 24, 2025, climbing roughly 1.4%–1.5% and trading near the 6,700 level by late session. The tech-heavy Nasdaq outperformed with gains of about 2%–2.5%, while the Dow Jones rose around 0.5%. [1]
Behind today’s broad advance:
- A sharp rebound in mega-cap tech and AI names led by Alphabet, Tesla, Broadcom and Palantir. [2]
- Surging expectations for a Federal Reserve rate cut in December, which pushed Treasury yields lower. [3]
- A “very good” phone call between U.S. President Donald Trump and China’s President Xi Jinping, easing some trade and geopolitical anxieties. [4]
Even after a choppy November that saw tech wobble and volatility spike, the S&P 500 remains within roughly 3% of its all‑time high set last month, underlining how resilient the benchmark has been in the face of rising uncertainty. [5]
How the S&P 500 Traded Today
As of the latest readings on Monday afternoon:
- S&P 500: around 6,700, up roughly 1.4%–1.5% on the day
- Dow Jones Industrial Average: about 46,450, up roughly 0.5%
- Nasdaq Composite / Nasdaq 100: up about 2%–2.5%, outperforming on tech strength [6]
Live quote data from Investing.com showed the S&P 500 near 6,698, up 95 points (+1.45%), with the Dow higher by about 211 points (+0.46%) late in the session. [7]
The 10‑year U.S. Treasury yield slipped to roughly 4.03%–4.04%, extending last week’s move lower and reinforcing the idea that bond markets are increasingly confident about a near‑term Fed rate cut. [8]
Three Big Drivers Behind Today’s S&P 500 Rally
1. Fed Rate‑Cut Bets Surge Into the December Meeting
A major narrative on Wall Street today is simple: “The Fed might actually cut in December.”
- Dovish comments from Fed Governor Christopher Waller and New York Fed President John Williams late last week reset expectations around the path of monetary policy. [9]
- According to CME FedWatch probabilities cited in multiple market notes, traders are now pricing in around a 75%–80% chance of a 25‑basis‑point rate cut in December, up from roughly 40% a week ago and well below 50% just recently. [10]
Lower expected policy rates did two things for equities today:
- Supported valuations, especially for long‑duration assets like high‑growth tech and AI names, where future cash flows are very sensitive to discount rates.
- Pulled down bond yields, with the U.S. 10‑year hovering near 4.03%–4.04%, giving an important tailwind to risk assets. [11]
Still, Fed officials are far from united. Some policymakers remain wary of cutting too quickly while inflation is still above the 2% target, and research from firms like J.P. Morgan Asset Management points out that rate cuts driven by economic weakness historically have not always supported equities for long. [12]
2. Mega‑Cap Tech and AI Stocks Lead a Powerful Comeback
Today’s move was unmistakably tech‑led:
- Alphabet (Google) rallied around 4%–5%, helped by ongoing enthusiasm for its latest AI advances, including its Gemini model, and a broader recovery in AI sentiment. [13]
- Tesla jumped roughly 6%–7%, extending gains after a rough stretch earlier in November. [14]
- Broadcom surged in the double digits (around 10%), while Palantir and other AI‑linked names rose more than 5%. [15]
Reuters reported that communication services—which includes Alphabet—and an index of chipmakers each climbed around 3%–4%, making them the standout S&P 500 sectors on the day. [16]
This rebound comes after several weeks of turbulence:
- The S&P 500 fell about 2% last week, with tech and crypto leading the sell‑off. [17]
- The VIX volatility index spiked above 28 before easing back toward the low‑20s, signalling significant investor anxiety. [18]
- Analysts have increasingly questioned whether the AI trade is morphing into a bubble, amplifying intraday swings as investors constantly reassess how much they’re willing to pay for future growth. [19]
Today, at least, fear of missing out (FOMO) on another leg higher in AI‑driven tech appeared to overwhelm bubble worries.
3. Trump–Xi Call Eases Trade and Geopolitical Jitters
Geopolitics also played a starring role in Monday’s risk rally.
U.S. President Donald Trump said he had a “very good” phone call with China’s President Xi Jinping, during which the leaders discussed:
- The war in Ukraine
- Fentanyl trafficking
- A new deal for U.S. farmers
Trump described the relationship with China as “extremely strong” and said he had accepted an invitation to visit China in April 2026, with Xi expected to make a reciprocal visit to the United States later in the year. [20]
Chinese state media and various market commentators framed the call as a sign that U.S.–China relations are stabilising and even improving, particularly around trade and agricultural purchases. [21]
For markets, that matters because:
- It reduces tail‑risk around an escalation in tariffs.
- It offers hope for stronger agricultural exports and somewhat less friction in the tech supply chain.
- It adds to the narrative of easing global uncertainty, which dovetails with bullish 2026 S&P 500 forecasts from large banks.
Deutsche Bank, for example, reiterated a street‑high S&P 500 target of 8,000 by the end of 2026, while HSBC sees the index reaching 7,500, citing lower interest rates and improving trade dynamics as major drivers. [22]
Sector and Stock Winners Inside the S&P 500
Under the surface of today’s headline move, sector rotation was very clear:
- Communication Services (home to Alphabet and other media/online advertising names) was among the top‑performing S&P 500 sectors, rising around 3%. [23]
- Information Technology and Semiconductors also outperformed, with a major chip index jumping over 4% as AI‑linked hardware names caught a strong bid. [24]
- Health insurers and select hospital operators advanced after policy headlines suggested possible subsidy extensions, while Bristol‑Myers gained following positive late‑stage data from a European competitor’s cardiovascular drug, which investors read as validating demand for similar therapies. [25]
There were pockets of weakness, though:
- Novo Nordisk slid on disappointing Alzheimer’s trial results, weighing on parts of the healthcare space. [26]
- Some defensive sectors lagged as investors rotated back into growth and cyclicals amid rising risk appetite.
Overall, market breadth was better than during the recent tech slump, but not universally strong—prior data showed that only about a third to a half of S&P 500 components were trading above key moving averages, reflecting how concentrated this year’s gains remain. [27]
Macro Backdrop: A Rebound After a Bruising Week
Today’s rally sits on top of a more complicated underlying picture:
- Last week’s approximate 2% slide in the S&P 500 and a multi‑week climb in the VIX highlighted growing concern over AI valuations, crypto volatility, and the economic outlook. [28]
- A long U.S. government shutdown earlier in the fall delayed key economic data, making it harder for investors to read the macro signals in real time. [29]
- Fresh research from J.P. Morgan Asset Management notes that labor market slack is quietly building: unemployment has risen toward 4.4%, the gap between “jobs plentiful” and “jobs hard to get” has narrowed sharply, and continuing jobless claims have climbed to new cycle highs. [30]
That combination gives markets a strange mix of:
- Good news for rates (more slack means less inflation pressure, which supports rate cuts).
- Potentially bad news for growth and earnings if the job market deteriorates too far.
In other words, some of the optimism powering today’s rally—particularly around aggressive 2026 targets—rests on a knife‑edge scenario where the Fed eases policy without the economy sliding into a deeper downturn.
What Today’s S&P 500 Move Means for Investors
For short‑term traders, Monday looked like:
- A strong relief rally after a rough stretch for tech and high‑beta names.
- A sentiment reset toward the idea that the Fed could cut in December and that U.S.–China tensions may be thawing.
For longer‑term investors, several themes stand out:
- Concentration risk is still real
A large share of the S&P 500’s gains again came from a handful of mega‑cap tech and AI names. That can turbo‑charge returns in the short run, but it also means the index is more exposed if sentiment toward AI or a few key companies sours. [31] - The “soft‑landing vs. slowdown” debate isn’t settled
Rising odds of a December rate cut look supportive, but they’re occurring alongside rising unemployment and growing labor market slack. If cuts come because growth is faltering rather than simply because inflation is under control, that could eventually weigh on earnings and valuation multiples. [32] - Valuations remain elevated near record highs
With the S&P 500 still within a few percent of its all‑time high and tech again in the driver’s seat, investors may want to be mindful of valuation risk, even if the Fed does deliver the cuts the market expects. [33]
Diversification across sectors and styles (growth vs. value, large vs. small cap), along with attention to overall risk tolerance and time horizon, remains a key way to navigate these sharp day‑to‑day swings.
What to Watch Next This Week
The Thanksgiving‑shortened week still has several important catalysts that could quickly reinforce—or unwind—today’s optimism:
- Inflation data: The delayed Producer Price Index (PPI) for September is due, with consensus pointing to roughly a 2.6% year‑over‑year increase. A hotter print could challenge rate‑cut expectations. [34]
- Retail sales & holiday spending: Upcoming data and early Black Friday/Cyber Monday indications will be watched for signs of consumer resilience as holiday shopping ramps up. [35]
- Treasury auctions: A busy slate of U.S. Treasury sales may test demand for government debt and influence longer‑term yields—another key input for equity valuations. [36]
- Further headlines on U.S.–China relations: Markets will monitor follow‑through on the Trump–Xi call, including any additional detail on tariffs, agricultural purchases, and technology export controls. [37]
For now, though, “S&P 500 today” is a story of renewed risk appetite, AI‑powered tech leadership, and a market that is betting—perhaps heavily—that the Fed and geopolitics are finally starting to tilt in its favour.
References
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