A late November rally propelled stocks near record highs, with investor optimism over a potential Federal Reserve interest-rate cut in December helping reverse the effects of an earlier midmonth market slump.
The S&P 500 rose 0.5% on Friday, pushing it near a record set in late October and helping the index eke out a 0.1% monthly gain. The Dow Jones Industrial Average advanced 0.6% on the day, finishing the month with a 0.3% gain.
The tech-heavy Nasdaq, however, registered its first monthly loss since March, falling 1.5% after a choppy period spurred by fears of an artificial-intelligence bubble. The index added about 0.7% Friday.
Stocks across the board gained in Friday’s shortened session despite a CME Group outage that disrupted futures trading overnight.
The Nasdaq-led gains were bolstered by chip stocks including Intel, Analog Devices and Micron Technology, and Magnificent Seven names like Amazon and Meta Platforms. Nvidia defied the trend, dropping 1.8% and capping a rocky month for the stock.
This week’s upturn, which pushed the S&P 500 and Dow into the black for November, helped notch a seventh consecutive month of gains. That marks the blue-chip index’s longest winning streak since the start of 2018.
CME said its derivatives markets reopened at 8:30 a.m. ET on Friday. Before then, traders hadn’t been able to buy or sell CME futures and options, including for U.S. indexes, Treasurys, gold and oil, due to cooling problems at a key data center. Analysts said the CME outage lowered trading volumes on what was already expected to be one of the year’s quietest trading days.
Some investors are cautiously optimistic about the market’s next move, viewing the recent tech-driven decline as a welcome correction that has brought down the valuations of the more speculative market areas.
“That was a healthy correction that burst a bubble and taught some investors that earnings, cash flow and valuation actually do matter,” said Jay Hatfield, chief executive at Infrastructure Capital Advisors.
Global markets were little changed, with the Stoxx Europe 600 and Japan’s Nikkei 225 rising less than 0.3%. Hong Kong’s Hang Seng Index fell by a similar percentage. The European benchmark notched a fifth consecutive monthly gain, while the two Asian gauges ended November in the red.
Shares of some U.S. retail chains rose, as shoppers flocked to snap up Black Friday bargains. Walmart gained 1.3%. The National Retail Federation forecasts a record 186.9 million people to shop between Thanksgiving and “Cyber Monday” on Dec. 1.
Expectations for a Federal Reserve interest-rate cut next month, following signs the labor market is cooling, have bolstered markets. Fed allies of Chair Jerome Powell have laid the groundwork for him to push a cut through a divided committee. Traders have doubled their bets over the last week on a reduction to around 87%, according to the CME’s FedWatch tool.
“Would a 0.25-percentage-point reduction in the federal-funds rate make a significant difference? Not by itself, but it carries important signaling value,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management. “A cut could indicate not only that the Fed recognizes signs of a softening labor market, but—more importantly—that it is prepared to act in response.”
Silver front-month futures jumped Friday, topping $56 per troy ounce and hitting a record high. Analysts attributed the surge to a supply squeeze, with Chinese inventories at the lowest level in a decade, as well as expectations for another Fed cut. Prices for silver, which holds value as both a precious and an industrial metal, have almost doubled this year. Gold futures also rallied Friday, settling at their highest level in over a month.
The dollar held broadly steady against a basket of other currencies, after slipping earlier this week. Treasury yields edged up but remained around their lowest levels since late October.
Bitcoin topped $92,000 before paring some gains. It has regained ground after sliding below $81,000 last week but remains far off its October peak above $126,000. Shares in Coinbase and bitcoin-buyer Strategy gained.
