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AI Stocks Rebound, Market Eyes Fed Rate Cut Hopes
25 Nov
Summary
- Major US stock averages saw a significant rebound on Monday.
- AI and tech stocks, particularly Alphabet and Broadcom, led the gains.
- Markets anticipate a Federal Reserve interest rate cut in December.
Stock futures showed minimal change Monday night, following a robust rebound in major U.S. averages earlier in the day. This upward movement was primarily fueled by strength in the artificial intelligence sector and renewed optimism surrounding potential Federal Reserve interest rate cuts. The Nasdaq Composite experienced its best day since May 12, with significant gains seen in major tech companies.
Alphabet and chipmaker Broadcom emerged as notable outperformers, with their stocks surging due to strong performance in high-performance chip businesses. While AI stocks have been the main driver of gains this year, recent pullbacks have led to questions about tech valuations. Despite the recent rally, the S&P 500, Nasdaq, and Dow Jones Industrial Average are all projected to end November with losses.
Market participants are closely monitoring the Federal Reserve's upcoming monetary policy decision. Current sentiment, supported by statements from Federal Reserve officials, suggests a high probability of a quarter-percentage-point rate cut in December. This anticipation provides a degree of support for the market as it heads into the year-end, although analysts advise a discerning view.
