U.S. Stock Markets Bounce Back Amid AI Valuation Concerns
U.S. stock markets are demonstrating resilience, navigating a shortened Thanksgiving week after one of the most turbulent periods of 2025. The S&P 500 bounced back by 1% on Friday, recovering from significant weekly losses. Meanwhile, Asian markets are poised for positive openings, bolstered by potential Federal Reserve rate cuts and rumors of possible Nvidia chip sales to China.
The recent market volatility is rooted in escalating concerns about AI stock valuations and uncertainty surrounding Federal Reserve monetary policy. The tech-centric Nasdaq is approximately 7% below its recent peak, while the S&P 500 is still about 4% off its late-October record highs. The focus of investors is primarily on the possibility of the Fed cutting rates in December, with odds wavering between 40% and 70%.
Market participants are also closely monitoring key earnings reports this week from companies such as Zoom, which will shed light on the adoption of AI-powered collaboration tools, and Agilent Technologies, which will provide insights into biotech sector demand. The shortened trading week due to Thanksgiving offers a respite for investors to evaluate the sustainability of recent market movements.