US stocks rally as Fed rate cut hopes rise ahead of December meeting

Markets surge despite tech sector shake-up

United States (US) stock markets finished higher on Friday, buoyed by growing confidence that the Federal Reserve (Fed) will cut rates at its 10 December Federal Open Market Committee (FOMC) meeting. In a holiday-shortened week, the Nasdaq 100 surged 4.93%, the S&P 500 gained 3.73%, and the Dow Jones added 1,471 points, or 3.18%.

While all three indices ended the week positively, November’s overall performance was mixed. The S&P 500 and the Dow Jones posted monthly gains, but the Nasdaq 100 snapped a seven-month winning streak, falling by 1.64% in November.

This was largely due to a 12.59% drop in index heavyweight NVIDIA to $177.00, marking its worst month since March. Investors rotated out of the AI chip leader into Alphabet, which surged 13.59% last month to $320.12.

The switch, which appears to have further to run, is being driven by Google Cloud’s 34% revenue surge, fuelled by explosive tensor processing unit (TPU) demand and further boosted by the recent Gemini 3 launch – Google’s most capable multimodal model, optimised for TPU clusters and instantly rolled out across Search.

Key data releases this week

Looking ahead, this week will feature the following releases:

• September’s core personal consumption expenditures (PCE) inflation 
• Personal income and spending figures
• November’s Institute for Supply Management (ISM) purchasing managers’ index (PMI) reports

We will monitor the ISM services PMI closely (previewed below), given that services account for approximately 70% – 75% of US gross domestic product (GDP) and the insights it provides into the current state of the labour market.

Although this week is a Fed blackout period, a few key speaking engagements are scheduled: Powell is set to speak on Monday at a memorial event, while Bowman will testify before the House Financial Services Committee on Thursday.

ISM services PMI

Date: Thursday, 4 December at 2.00am AEDT

October’s ISM services PMI delivered a strong upside surprise, rising to 52.4 from 50.0 in September and exceeding consensus expectations of 50.8, the strongest expansion since February 2025.

The only notable weak spot was employment, which remained in contraction at 48.2 (though slightly improved from September’s 47.2), with respondents continuing to express caution around headcount growth despite broader improvement.

Attention now turns to the November release. Consensus anticipates a modest increase to 52.7, but markets will be particularly focused on whether employment weakness persists. If it does, it will reinforce the roughly 86% probability currently priced in for a 25 basis point (bp) rate cut at the 10 December FOMC meeting.

ISM services PMI chart

Nasdaq 100 technical analysis

Last Friday’s (21 November) break and rebound back above critical support in the 24,000 area, followed by last Monday’s (24 November) rally, was an important inflection point for the Nasdaq 100.

Specifically, it was a false break lower that leaves the 23,854 low (21 November) as a strong candidate to be the bottom of the correction (Wave IV) from the late October 26,182 high (Wave III).

As such, providing the Nasdaq 100 remains above medium-term support at 24000 – 23800, we will hold a bullish bias, looking for a Wave V rally which will involve a test of the record 26182 high, before a push towards 27000.

Nasdaq 100 daily chart

S&P 500 technical analysis

Last Friday’s (21 November) break and rebound back above critical support at 6550, followed by last Monday’s (24 November) rally, was an important inflection point for the S&P 500.

Specifically, it was a false break lower that leaves the 6521 low (21 November) as a strong candidate to be the bottom of the correction (Wave IV) from the late October 6920 high (Wave III).

As such, providing the S&P 500 remains above medium-term support at 6550 – 6520, we will hold a bullish bias, looking for a Wave V rally which will involve a test of the record 6920 high, before a push towards 7000.

S&P 500 daily chart

• _{Source: TradingView. The figures stated are as of 1 December 2025. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation.}