Market Update: Stocks Rise Ahead of Thanksgiving
On Monday, stocks experienced a rally, particularly with Alphabet gaining momentum as investors looked to recuperate during the Thanksgiving holiday week. This comes after a recent decline that deflated the artificial intelligence market’s earlier surge.
The S&P 500 increased by 1.3%, while the Nasdaq Composite saw a more substantial rise of 2.3%. The Dow Jones Industrial Average also climbed, adding 248 points, or 0.5%. It’s worth noting that the stock market will be closed on Thursday for Thanksgiving and will have an early closing at 1 p.m. ET on Friday.
Alphabet’s shares perked up as optimism grew surrounding its role in the AI sector. Recently, Google unveiled its enhanced AI model, Gemini 3, which is a significant upgrade following the previous model released about eight months ago. This development had already propelled the stock up by 4% prior to Monday’s trading.
The enthusiasm surrounding Alphabet appears to have benefited other firms in the AI arena. For instance, Broadcom’s stock surged by 9%, while Micron Technology saw a 7% uptick. Additionally, Palantir Technologies and AMD both experienced around a 5% increase.
However, there are cautionary notes. Melissa Brown, the managing director of investment decision research at SimCorp, expressed concerns about the reliance on a single stock driving market growth. “It’s great for Alphabet and its investors, but it’s worrisome when one stock essentially fuels the market’s rise. This might not be a lasting trend,” she stated.
The stock market is trying to build on the rebound that started last Friday, largely fueled by the New York Fed president signaling a potential rate cut in December. Nevertheless, stock averages are still considerably lower compared to earlier this month, largely due to high valuations in AI stocks that had previously inflated the market in 2025.
Recent numbers indicate the S&P 500 dropped approximately 2% last week, while in November, it’s down over 2%. The Nasdaq Composite fell nearly 3% last week, contributing to a 4% decline this month. The Dow Jones Industrial Average also faced a 2% setback last week and is similarly down more than 2% since November began.
The remainder of November might pose challenges. Anticipated reductions in trading volumes could lead to heightened volatility, especially with little significant news before the Fed’s upcoming December policy meeting. Brown warned that if economic indicators, including the September retail sales and producer price index set for release on Tuesday, show signs of a stagflation scenario, it could impact market sentiment.
“Markets might still perform decently, but negative sentiments can amplify bad news. Combined with lower trading volumes, the effects of any adverse developments could be intensified,” she added.
Correction: The September retail sales and producer price index reports are indeed scheduled for release on Tuesday; previous mentions of the month were incorrect.
