Wall Street Heads Into Thanksgiving With a Grin — Rate-Cut Fever Lifts Markets Again

With Thanksgiving around the corner and Wall Street preparing for a long weekend nap, traders pushed the major indices higher for a fourth straight session, energized by growing conviction that the Federal Reserve will deliver another 25 bps rate cut in December.

Markets Rally as Rate-Cut Optimism Strengthens

I saw a familiar pattern take shape yesterday: falling macro momentum meets rising hopes for monetary easing. The Dow Jones and Nasdaq both climbed, extending a rally that has now erased last week’s minor pullback.

Investors are assigning roughly an 80–85% probability to a December rate cut, a sharp jump from just a few days ago. A cocktail of softer economic data helped fuel that conviction:

• Initial jobless claims fell slightly.

• Durable goods orders slowed.

• Chicago PMI plunged in November.

• And the Fed’s Beige Book showed households feeling the squeeze from higher living costs, while companies largely froze hiring without moving into layoff mode.

None of this screams “booming economy”, but it does support a Fed that’s increasingly comfortable easing again. And for now, traders are happy to focus on that part of the story.

Tech: Nvidia Rebounds as Alphabet Pauses

The rotation within the AI trade continued for another day. After the market briefly flirted with the idea that Alphabet (GOOGL | -1.08%) could erode Nvidia’s (NVDA | +1.37%) dominance in AI chips - thanks to a reported Meta TPU deal - the pendulum swung back midweek. Nvidia bounced +1.4%, while Alphabet cooled roughly –1%.

I don’t blame investors for being jumpy here. The battle for AI hardware leadership is only getting started, but Nvidia isn’t about to hand over the crown without a fight.

Lower on the tech ladder, Dell (DELL | +5.83%) surged +5.8% after a strong earnings update. Clearly, not all of Big Tech has a monopoly on the spotlight.

Deere Stumbles as the Real Economy Feels the Strain

If tech had something to celebrate, John Deere (DE | -5.67%) brought everyone back down to earth. The agricultural machinery giant delivered a bleak outlook:

• This year’s profit is expected to fall to $4.0–$4.75B, down from $5B last year.

• Analysts were looking for $5.11B instead, quite the miss.

The stock dropped –5.7%, and honestly, it highlights something I’ve been sensing for weeks: the real economy is slowing faster than the AI-driven Nasdaq would have you believe. When farmers cut spending, it’s rarely a bullish macro signal.

Other Movers: Tesla Expands Robotaxi Fleet, Novo Nordisk Eases Fears

There was no shortage of corporate headlines:

Tesla (TSLA | +1.71%) will double the number of robotaxis in Texas in December, only months after launching the service. The stock gained +1.3%. The market clearly still loves Elon’s future-forward narratives, even in prototype form.

Novo Nordisk (NVO | +3.51%) jumped +3.5% after Medicare announced lower negotiated prices on 15 drugs, including Ozempic. Investors had braced for a harsher pricing blow, so in classic market fashion, “less bad” became “good.”

Meanwhile, oil ticked modestly higher and the EUR/USD drifted up to 1.1588, barely making a dent in the broader macro picture.

Looking Ahead: A Quiet End to the Week

With Wall Street closed today and operating only a half-day tomorrow, trading volumes already began thinning out by Wednesday afternoon. After four consecutive green sessions, I won’t be surprised if the market simply takes a breather into the weekend.

But make no mistake: next week will matter. With rate expectations now aggressively priced in, any data that contradicts the “cut in December” narrative could jolt markets back into volatility.

For now, though, we head into Thanksgiving with a rare gift: a dose of market calm.

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Kristoff - ChartMill

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